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2015 Annual Report
National Financial Inclusion Strategy
Financial Inclusion Secretariat
Central Bank of Nigeria
Page 2
PROVIDERS:
ENABLERS:
SUPPORTING INSTITUTIONS:
Stakeholder Institutions
Page 3
ACKNOWLEDGEMENTS
The Annual Report on the National Financial Inclusion Strategy is an outcome
of statistical analysis, reviews of periodic returns from stakeholders, desk
research on local and international developments, discussions, review
meetings and exposure for comments.
The Financial Inclusion Secretariat acknowledges the contributions of all
stakeholders whose input, involvement, and participation have helped in the
publication of this Report.
It is our earnest expectation that the report would stimulate greater
commitment by stakeholders to achieve a 20 per cent adult financial
exclusion rate in Nigeria by the year 2020.
Editorial Board:
Mrs. Temitope Akin-Fadeyi
Mr. Joseph A. Attah
Mr. Olayinka A. Peter
Mr. Maximillian C. Belonwu
Ms. Sophia Abu
Mr. Johannes Prochazka
Page 4
LIST OF ACRONYMS
ABP Anchor Borrowers’ Programme
AFI Alliance for Financial Inclusion
ALMPO Association of Licensed Mobile Payments Operators
ANMFIN Association of Non-Bank Microfinance Institutions of Nigeria
ATM Automated Teller Machine
BOI Bank of Industry
BVN Bank Verification Number
CB Commercial Bank
CBN Central Bank of Nigeria
CPS Contributory Pension Scheme
DMB Deposit Money Bank (Commercial Bank)
EDC Entrepreneurship Development Centre
EFInA Enhancing Financial Innovation &Access
FIS Financial Inclusion Secretariat
FMAN Fund Managers’ Association of Nigeria
GDP Gross Domestic Product
GIZ Deutsche Gesellschaft fuer Internationale Zusammenarbeit
KPI Key Performance Indicator
KYC Know Your Customer
MFB Microfinance Bank
MFI Microfinance Institution
MM Mobile Money
MMO Mobile Money Operator
MNO Mobile Network Operator
MSMEs Micro, Small, and Medium Enterprises
MSMEDF Micro, Small, and Medium Enterprises Development Fund
NAICOM National Insurance Commission
NAMB National Association of Microfinance Banks
NBS National Bureau of Statistics
NCC Nigerian Communications Commission
NDIC Nigeria Deposit Insurance Corporation
NFIS National Financial Inclusion Strategy
NHIS National Health Insurance Scheme
NSITF Nigeria Social Insurance Trust Fund
NIA Nigerian Insurers Association
NIBSS Nigeria Inter-Bank Settlement Scheme
NIMC National Identity Management Commission
NIN National Identification Number
NIPOST Nigerian Postal Service
NSE Nigerian Stock Exchange
PenCom National Pension Commission
PenOp Pension Fund Operators Association of Nigeria
PoS Point-of-Sale
PWD People with Disabilities
RSA Retirement Savings Account
SEC Securities and Exchange Commission
Page 5
TABLE OF CONTENTS
ACKNOWLEDGEMENTS 3
LIST OF ACRONYMS 4
EXECUTIVE SUMMARY 8
CHAPTER ONE 16
1. INTRODUCTION 16
1.1. Overview of Global Developments in Financial Inclusion 16
1.2. Overview of the National Financial Inclusion Strategy 17
1.3. Overview of Financial Inclusion Developments in Nigeria since 2012 19
CHAPTER TWO 21
2. IMPLEMENTATION ENVIRONMENT 21
2.1. Macroeconomic Environment 21
2.2. Banking Sector 22
2.3. Microfinance Bank Sector 23
2.4. E-Payments Sector 24
2.5. Insurance Sector 29
2.6. Pension Sector 29
2.7. Capital Market Sector 30
2.8. Informal Financial Sector 32
2.9. National Financial Inclusion Governance Structure 32
2.9.1. National Financial Inclusion Steering Committee 32
2.9.2. National Financial Inclusion Technical Committee 32
2.9.3. National Financial Inclusion Working Groups 33
2.9.4. Financial Inclusion Secretariat 34
CHAPTER THREE 36
3. STRATEGY IMPLEMENTATION PROGRESS 36
Page 6
3.1. Products 36
3.1.1. Electronic Payments 36
3.1.2. Savings 38
3.1.3. Credit 40
3.1.4. Insurance 43
3.1.5. Pensions 44
3.1.6. Capital Market Products 47
3.2. Channels 47
3.2.1. Commercial Bank Branches 47
3.2.2. Microfinance Branches 50
3.2.3. Automated Teller Machines 52
3.2.4. Point-of-Sale Devices 53
3.2.5. Agents 54
3.3. Enablers 56
3.3.1. Know Your Customer (KYC) ID 56
3.3.2. Financial Literacy 59
3.3.3. Consumer Protection 60
3.3.4. Women Initiatives 60
3.3.5. Children and Youth Initiatives 61
CHAPTER FOUR 63
4. STAKEHOLDER ACTIVITIES 63
4.1. Providers 63
4.1.1. Bankers’ Committee 63
4.1.2. Fund Managers’ Association of Nigeria 63
4.1.3. Association of Non-Bank Microfinance Institution 64
4.1.4. Pension Funds Operators Association of Nigeria 64
4.1.5. Nigerian Insurers Association 64
4.1.6. Bank of Industry 65
4.2. Enablers 65
4.2.1. Regulators 65
4.2.1.1. Central Bank of Nigeria 65
4.2.1.2. National Pension Commission 69
4.2.1.3. National Insurance Commission 69
4.2.1.4. Securities and Exchange Commission 70
4.2.1.5. Nigerian Communications Commission 70
4.2.1.6. Nigeria Deposit Insurance Corporation 71
4.2.1.7. National Identity Management Commission 71
4.2.2. Government Ministries and Agencies 71
4.2.2.1. Federal Ministry of Finance 71
4.2.2.2. Federal Ministry of Communications 72
4.2.2.3. Federal Ministry of Women Affairs & Social Development 72
4.2.2.4. Federal Ministry of Youth Development 72
4.2.2.5. Nigerian Postal Service 73
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4.3. Supporting Institutions 73
4.3.1. Alliance for Financial Inclusion 73
4.3.2. Bill & Melinda Gates Foundation 74
4.3.3. Enhancing Financial Innovation & Access 74
4.3.4. Deutsche Gesellschaft fuer Internationale Zusammenarbeit 74
4.3.5. Mercy Corps 75
CHAPTER FIVE 77
5. RECOMMENDATIONS 77
CHAPTER SIX 80
6. CONCLUSION 80
7. APPENDIX 81
8. REFERENCES 100
Page 8
EXECUTIVE SUMMARY
Financial inclusion has remained a crucial topic on the global development
agenda over the recent years. For instance, the International Monetary Fund
has sustained its supply-side financial inclusion database and the World Bank
conducted the demand-side Findex survey to inform global policies on
financial inclusion. The G20 Global Partnership for Financial Inclusion anchors
a financial inclusion action plan, while the Bill & Melinda Gates Foundation
funds projects on financial inclusion in many countries, including Nigeria. The
Alliance for Financial Inclusion (AFI), an independent international member-
owned network of financial inclusion policymakers and regulators, has
continued to support financial inclusion efforts of member countries through
technical assistance, knowledge exchange and experience sharing.
Nigeria made a commitment to financial inclusion in the Maya Declaration,
which was adopted in Riviera Maya, Mexico, in 2011. The commitment was
to develop and pursue a financial inclusion strategy that would reduce the
adult financial exclusion rate from 46.3 per cent in 2010 to 20 per cent by
2020. The National Financial Inclusion Strategy was launched on 23rd
October, 2012. The Strategy has specific targets for products, including
payments, savings, credit, insurance, and pensions, as well as channels,
including commercial bank branches, microfinance bank branches, ATMs,
POS devices, and agents. Additional targets were defined for key enablers of
financial inclusion, including Know Your Customer identification, financial
literacy, consumer protection, women initiatives and children & youth
initiatives.
In 2015, the Nigerian economy grew by 2.8 per cent, which was a lower
growth rate than in previous years. One key factor for the growth moderation
was the persistent decline in the global oil price which resulted in a
substantial reduction of fiscal revenues. Other factors included insurgency in
the North Eastern region and increased transportation costs due to recurring
fuel scarcity. The macroeconomy, therefore, provided a less favourable
environment to financial inclusion developments than in previous years.
In spite of lower economic growth, many financial inclusion initiatives
progressed in 2015 (see Table 1). The two Governing Committees, the
National Financial Inclusion Steering and Technical Committees, were
inaugurated in January 2015 in order to oversee the implementation progress
of the Strategy. Additionally, four National Financial Inclusion Working Groups
were established to address specific implementation issues related to
products, channels, financial literacy and vulnerable segments. The National
Insurance Commission granted window microinsurance operation licenses to
17 insurance companies to drive insurance penetration among the low-
income segment of the population, while the National Pension Commission
established a department dedicated to micropensions. The Central Bank of
Page 9
Nigeria, in collaboration with the Bill & Melinda Gates Foundation, completed
the second round of the Geospatial Mapping Survey of financial access
points across the country. The Bank also approved the Regulatory Framework
for Licensing Super-Agents in Nigeria as well as the National Financial Literacy
Framework, while the Nigeria Deposit Insurance Corporation extended
deposit insurance to subscribers of mobile money products in order to
enhance consumer protection in Nigeria and support uptake of mobile
money.
Table 1: Implementation Status of Key Initiatives as at December 2015
Status Implementation
Area Initiative
Completed
Governance
Arrangement
The Governing Committees, the National Financial
Inclusion Steering Committee and the Financial
Inclusion Technical Committee, were inaugurated.
Four Working Groups were established to assist the
Technical Committee. Statutory meetings were
held in 2015.
Insurance The National Insurance Commission granted
window microinsurance operation licenses to 17
insurance companies.
Pensions The National Pension Commission established a
department dedicated to micropensions.
Financial
Access Points
The Central Bank of Nigeria in collaboration with
the Bill & Melinda Gates Foundation completed
the second round of the Geospatial Mapping
Survey of financial access points in Nigeria.
Agent Banking
The Central Bank of Nigeria approved and
released the Regulatory Framework for Licensing
Super-Agents in Nigeria.
Consumer
Protection
The Nigeria Deposit Insurance Corporation
extended deposit insurance to subscribers of
mobile money products.
Financial
Literacy
The Central Bank of Nigeria approved the National
Financial Literacy Framework as well as the results
of the National Financial Literacy Baseline Survey.
On Track
Payments The Central Bank of Nigeria rolled out the Cashless
Nigeria Project in six States and the Federal Capital
Territory.
Credit
The web-based National Collateral Registry was
developed in 2015 and the first User Acceptance
Test conducted.
Pensions The National Pension Commission drafted
guidelines on micropensions.
Page 10
Status Implementation
Area Initiative
At Risk
Consumer
Protection
The Central Bank of Nigeria developed the
Consumer Protection Framework, but approval is
still outstanding.
Insurance The Bancassurance Guidelines have not been
finalized.
Unique
National
Identification
Number
The harmonization exercise of different
identifications by the National Identity
Management Commission progressed slowly.
While these initiatives are positive and surely will promote financial inclusion
further in the coming years, in terms of progress made on the defined targets
for 2015, the status is presented as follows (see Table 2):
Products:
Electronic payments: While the number of transaction accounts
increased by 5.3 million or 7.8 per cent from 2014 to 2015, it is not clear
whether the target of 53 per cent of the Nigerian adult population
having and using an electronic payment product was reached. This is
mainly because of a lack of unique identification of customers across
financial institutions and data constraints as at December 2015.
Savings: Similar to electronic payments, the number of savings-related
accounts increased by 5.6 million or 7.8 per cent from 2014 to 2015. It is
not clear whether the 2015 target was achieved because of the issue
of a lack of unique identification of customers and data constraints at
the time of writing.
Credit: The number of credit accounts increased by approximately
380,000 from 6.9 to 7.2 million from 2014 to 2015, representing a growth
of 5.6 per cent. While this increase is positive, the target of 26 per cent
of the adult population using a credit product at a formal financial
institution was not achieved.
Insurance: An assessment on the achievement of the insurance target
cannot be made because data provided by insurance companies
was incomplete at the time of preparing the report.
Pensions: The number of adult Nigerians registered with a regulated
pension scheme increased by approximately 770,000 from 6.6 in 2014
to 7.3 million in 2015. The percentage of adult Nigerians registered in a
regulated pension scheme went up from 7.0 to 7.6 per cent over the
period under review. While the trend is positive, the 2015 target of 22
per cent enrolment of adult Nigerians was not achieved.
Page 11
Channels:
Commercial Bank Branches: The number of commercial bank
branches decreased marginally from 5,508 to 5,462 branches between
2014 and 2015. Relative to the adult population, there were 5.7
branches per 100,000 adults in Nigeria as at December 2015,
compared with 5.9 branches per 100,000 adults as at December 2014.
Comparing the achieved value with the defined target of 7.5
branches per 100,000 adults by 2015, the actual status is not on track.
Microfinance Bank Branches: Although the number of microfinance
bank branches increased by 120 or 5.7 per cent between 2014 and
2015, the number of microfinance bank branches per 100,000 adults
remained at 2.3 during the review period. Compared to the 2015
target of 4.5 microfinance bank branches per 100,000 adults, the
achieved value was only slightly more than half of the target.
Automated Teller Machines (ATMs): The number of ATMs in Nigeria
increased by 517 or 3.2 per cent from 2014 to 2015, while the number
of ATMs per 100,000 adults grew marginally from 17.0 to 17.1. As the
actually achieved value was only about 40 per cent of the target, the
2015 target of the ATM key performance indicator (KPI) was not met.
Point-of-Sale (PoS) Devices: For the computation of the PoS devices
KPI, only deployed PoS terminals were considered. Based on this
narrower definition, there were 116,868 POS devices as at December
2015, compared to 82,549 deployed devices as at December 2014. In
terms of PoS devices per 100,000 adults, the value increased by 37.6
per cent from 88.3 to 121.5. While this was only 27.5 per cent of the
2015 target of 442.6 PoS devices per 100,000 adults, the status is not
fully clear as other PoS devices, such as mobile phones, were not
captured.
Agents: As at December 2015, there were 688 bank agents at three
financial institutions. Additionally, the Geospatial Mapping Survey of
financial access points captured 3,567 agent locations which were
engaging in mobile money activities as at April 2015. While based on
these numbers, the 2015 target of 31.0 agents per 100,000 adults would
not have been met, a complete assessment cannot be made. This is
because data on the number of mobile money agents as at
December 2015 was not fully available from mobile money operators.
Also, agents were not uniquely identifiable across financial institutions
and mobile money operators.
Page 12
Enablers:
KYC Tier 1 ID: 62.8 per cent of the adult population were found to have
a mobile phone in 2014, and therefore would be able to open a KYC
Tier 1 bank account. The 59 per cent target, therefore, was reached.
National Identification Number (NIN): The number of adults with a
National Identification Number advanced from 5.0 to 7.2 million during
the year, while the percentage of adult Nigerians having a NIN
increased from 5.3 to 7.5 per cent. The increase, however, feel short of
the target of 59 per cent.
The following measures are recommended to the three key stakeholder
groups:
Providers:
Further commit to financial inclusion targets: Financial services
providers are strongly encouraged to analyse the potential of the
financially excluded segment of the population and develop specific
financial inclusion targets, strategies, and implementation plans.
Enhance financial inclusion database: Providers need to collect
financial inclusion-related data and provide it to the respective
regulators. This will make it easier to track financial inclusion
achievements quantitatively from the supply-side in future.
Improve the dispersion of financial access points: Financial access
points need to be expanded substantially. However, in particular, new
access points should be deployed in areas with a large financially
excluded population and no or only few currently existing access
points.
Take advantage of new technologies: Mobile channels should be used
to reach the financially excluded given its lower cost compared to
traditional channels and the potential to reach Nigerians even in
remote areas.
Form targeted partnerships: Partnerships should be intensified in order
to reach the excluded population more efficiently.
Enablers:
Deliver on financial inclusion commitments: Regulators and
government ministries, departments and agencies need to strictly
pursue defined implementation plans in support of their roles and
responsibilities. Also five-year targets should be broken down into yearly
Page 13
and quarterly targets in order to better measure progress made on a
regular basis.
Collate and publish financial inclusion data: Regulators shall ensure
that financial inclusion-relevant data is collected from services
providers in a timely manner and aggregate data are made available
to the public to support decision-making.
Leverage on new technologies: Regulators and public institutions need
to provide an enabling environment for providers to use new
technologies in delivering financial services to the financially excluded
population. Also, regulators and public institutions should ensure that all
their payments are digitized in order to promote financial inclusion
directly.
Supporting Institutions:
Coordinate with various stakeholders to maximize impact: Supporting
institutions need to perform high level analysis when providing
assistance in order to allow for synergies between different existing
projects and to maximize the impact on financial inclusion.
2015 has been a year with many positive financial inclusion developments.
However, concerted efforts of all stakeholders are needed over the next five
years to achieve the defined 2020 financial inclusion targets. In the current
times of a low oil price and fiscal constraint, it is even more important that
financial inclusion initiatives are reinforced to contribute to job creation,
poverty reduction and economic growth.
The 2015 Annual Report on the National Financial Inclusion Strategy provides
an update on the progress made towards achieving the targets set in the
Strategy. Chapter 1 briefly describes global financial inclusion developments
and reviews key components of the National Financial Inclusion Strategy.
Chapter 2 summarizes the implementation environment, while Chapter 3
provides an update on the implementation progress. Chapter 4 describes
the financial inclusion activities of key stakeholders up to 2015 followed by
recommendations to three different stakeholder groups in Chapter 5.
Chapter 6 concludes the report.
Page 14
Table 2: Dashboard on Implementation Progress towards Targets
Definition of Desired
Indicator
Definition of
Proxy Indicatora
Baseline
2010b
Actual
2014c
Actual
2015c
Target
2015 Status
Target
2020 Comment
Payments: % of adult
population having a
payment product with
a formal financial
institutiond
# of transaction
accounts with a
Deposit Money
Bank or
Microfinance
Banke
22%
67.87m
trans-
action
accounts
73.17m
trans-
action
accounts
53%
(51.0m
adults)
70%
(77.4m
adults)
Lack of unique
identification of
customers across financial
institutions was challenge
to measurement.
However, # of transaction
accounts increased by
about 5.3m from 2014 to
2015.
Savings: % of adult
population having a
savings product with a
formal financial
institutiond
# of savings-
related
accounts with a
Deposit Money
Bank or
Microfinance
Bankf
24%
71.31m
savings-
related
accounts
76.89m
savings-
related
accounts
42%
(40.4m
adults)
60%
(66.3m
adults)
Lack of unique
identification of
customers across financial
institutions was challenge
to measurement, but # of
savings-related accounts
only increased by 5.6m
from 2014 to 2015.
Credit: % of adult
population using a
credit product with a
formal financial
institution
# of credit
accounts with a
Deposit Money
Bank or
Microfinance
Bankg
2%
6.86m
credit
accounts
7.25m
credit
accounts
26%
(25.0m
adults)
h 40%
(44.2m
adults)
# of credit accounts as at
2015 was far below the #
of adults required to meet
the 2015 credit target.
Insurance: % of adult
population being
covered by an
insurance policy with
a formal institution
# of insurance
policies
registered by the
National
Insurance
Commissioni
1%
1%
(Data in-
complete)
-
(Data in-
complete)
21%
(20.2m
adults)
40%
(44.2m
adults)
Lack of unique
identification of
customers across financial
institutions and lack of
data as at 2015 was
challenge to
measurement.
Pensions: % of adult population that is
registered with a regulated pension
schemej
5%
7.0%
(6.6m
adults)
7.6%
(7.3m
adults)
22%
(21.2m
adults)
40%
(44.2m
adults)
Progress made, but only
35% of the target was
achieved.
# of Commercial Bank Branches per
100,000 adultsk
6.8
5.9
(5,508
branches)
5.7
(5,462
branches)
7.5
(7,213
branches)
7.6
(8,398
branch-
es)
# of commercial bank
branches actually
decreased from 2014 to
2015 and also had
decreased since 2010 as
banks are focusing on
branchless models.
# of Microfinance Bank Branches per
100,000 adults 2.9
2.3
(2,107
branches)
2.3
(2,227
branches)
4.5
(4,328
branches)
5.0
(5,525
branch-
es)
# of microfinance bank
branches only increased
slightly from 2014.
# of ATMs per 100,000 adults
11.8
17.0
(15,935
ATMs)
17.1
(16,452
ATMs)
42.8
(41,160
ATMs)
59.6
(65,859
ATMs)
Actual was only 40% of
the target.
# of PoS Devices per
100,000 adults
PoS Terminals
per 100,000
adultsl
13.3
88.3
(82,549
PoS)
121.5
(116,868
PoS)
442.6
(425,638
PoS)
l 850.0
(939,267
PoS)
Not all PoS devices were
measured as at 12/ 2015.
# of Agents per 100,00 adultsm
0.0
-
(Data in-
complete)
-
(Data in-
complete)
31.0
(29,812
agents)
62.0
(68,511
agents)
Lack of unique
identification of agents
across financial institutions
and lack of data as at
12/2015 posed challenge
to measurement.
Know Your Customer
(KYC) Tier 1 ID:
% of adult population
having a KYC Tier 1 IDn
% of adult
population
having a
mobile phoneo
18%
62.8%
(58.7m
adults)
-
(Data in-
complete)
59%
(56.7m
adults)p
100%
(110.5m
adults)
Likely to be on track
based on 2014 demand-
side survey data (EFInA,
2014).q
National Identification Number (NIN):
% of adult population having a National
Identification Number (NIN)n
0%
5.3%
(5.0m
adults)
7.5%
(7.2m
adults)
59%
(56.7m
adults)p
100%
(110.5m
adults)
Increase made over 2014,
however, progress was
slow.
Target achieved or exceeded (Actual > 100%)
Target not achieved and unlikely to be
achieved within next period (Actual < 85%) Achievement unclear as indicator measured is different from
desired indicator or data is incomplete
Target not achieved, but could be achieved within next period
(85% < Actual < 100%)
Page 15
Notes on Table 2:
a Not all indicators were measured based on the desired definition due to data constraints from the supply
side and because EFInA’s biennial demand-side survey, which is used as the benchmark survey, was not
conducted in 2015. This is why a definition of the proxy indicator was included. This is the definition describing
how the indicator is being measured until existing data constraints have been removed. b Central Bank of Nigeria (2012a). c The data sources used are the following: Banking Supervision Department, Central Bank of Nigeria for
Payments, Savings, Credit and Commercial Bank Branches indicators; Other Financial Institutions Supervision
Department, Central Bank of Nigeria for Payments, Savings, Credit and Microfinance Bank Branches
indicators; Banking and Payments System Department, Central Bank of Nigeria for ATMs and PoS Devices
indicators; National Pension Commission for the Pensions indicator; EFInA (2014) for KYC Tier 1 ID indicator;
National Identity Management Commission for NIN indicator. The number of adults is estimated based on
data from EFInA’s Access to Financial Services in Nigeria 2014 survey and projections made by the National
Population Commission based on the 2006 Population Census. Data on microfinance banks is based on the
returns of 81% and 67% of all registered microfinance banks for the data as at 12/2014, and 12/2015,
respectively. d The National Financial Inclusion Strategy defined indicators based on the usage of financial services,
including payment and savings products. However, because it is easier to track ownership of payment and
savings products from the supply side and the proxy indicators are closer to the definitions based on
ownership, the stated indicators were defined based on ownership of payment and savings products. e Transaction accounts include current and savings deposit accounts at commercial banks and current and
voluntary savings accounts at microfinance banks; Please note that merchant banks are not considered;
Mobile money accounts are not considered in this report because of data issues; Individual as well as
corporate accounts are considered in this report because of a lack of differentiation in the data. f Savings-related accounts include current, savings deposit and fixed/term deposit accounts at commercial
banks and current, voluntary savings, mandatory deposit, fixed/term deposit and other deposit accounts at
microfinance banks; Please note that merchant banks are not considered; Mobile money accounts are not
considered because of data issues; Individual and corporate accounts are considered because of lack of
distinction in the data. g Credit accounts include both individual and corporate accounts because of lack of distinction in the data. h Status is red as the actual based on the proxy indicator would only be about 7.5% if each of the 7.2 million
accounts was linked to one adult only and it is very unlikely that including additional accounts held with
Primary Mortgage Banks would close the existing gap. i No data is provided for 2015 as only less than half of the registered insurance companies rendered returns.
Also, no data from the National Health Insurance Scheme and the Nigeria Social Insurance Trust Fund were
collected at the time of preparing the report. 2014 data is based on EFInA, 2014. j Data as at December 2014 does not include adults enrolled in the old defined benefit scheme, Pension
Transitional Arrangement Directorate (PTAD), as the data was not available at the time of writing. Therefore,
the value of the indicator as at 12/2014 may have been higher by up to approximately 0.2%-points. k Note that both approved and deployed branches and cash centres are included. However, approved but
unutilized branches and cash centres are not included. l Only deployed PoS terminals were considered. PoS terminals refer to devices used for electronic payments
by inserting or swiping a debit or credit card. Additional PoS devices, which the data as at December 2015
does not capture, include mobile phones or tablets. Therefore, the status as at December 2015 is unclear. m No data was provided on the number of agents as not all mobile money operators had replied at the time
of writing and because of lack of unique ID of agents which bears the risk of multiple counting of agents. n The National Financial Inclusion Strategy document defined a unique National Identity, issued by the
National Identity Management Commission (NIMC), as the actual KYD ID. However, given that the
harmonization exercise of several IDs, such as the BVN or the voter’s card, with the National Identification
Number (NIN) is still ongoing at the time of writing, another KYC ID indicator in addition to the National
Identification Number has been defined. This indicator is based on the KYC Tier 1 requirements, which state
that to open a KYC Tier 1 bank account, it is necessary to have a passport photograph as well as a
telephone number in addition to personal details such as, name, address, and gender. Therefore, provided
that an individual has an address and can obtain a passport photograph, the only identification he or she
needs, is a telephone number. This is why the percentage of the adult population which has a mobile phone
number can be used as a proxy to measure the percentage of the adult population that has sufficient
identification materials to open a KYC Tier 1 bank account. o The value refers to the percentage of adults owning a mobile phone (62.8%). Owning a mobile phone is
used here as a proxy for having a mobile phone number. p The target on KYC ID defined in the National Financial Inclusion Strategy is based on total population. As all
other indicators focus on the adult population only, the target for KYC ID has been modified according to the
adult population. This means that the same target of 59 per cent of the total population 2015 and 100 per
cent of the total population by 2020 was used analogously for the adult population only. q Status is green based on the assumption that the percentage of adults owning a mobile phone did not
decrease from 2014 to 2015.
Page 16
CHAPTER ONE
1. INTRODUCTION
This chapter provides a brief overview of global financial inclusion
developments, the National Financial Inclusion Strategy and summaries of
key financial inclusion developments in Nigeria since the launch of the
Strategy in 2012.
1.1. Overview of Global Developments in Financial Inclusion
Financial Inclusion has been increasingly accepted globally as an effective
tool to support economic development (e.g. Sahay et al., 2015; Andrianaivo
and Kpodar, 2011). There has thus been increasing commitment of various
global institutions to financial inclusion pursuits:
The World Bank conducts the demand-side Findex survey every three
years1.
The International Monetary Fund (IMF) has sustained its global supply-
side financial inclusion database2, and has recently published a paper
showing a positive effect of financial inclusion on economic growth
(Sahay et al., 2015).
The African Development Bank considers financial inclusion as a key
factor to sustainable growth for all Africans and argues that it is
imperative for fragile African countries to include financial inclusion
within national recovery strategies. It published a report on financial
inclusion in Africa in 2013.3
The G20 Global Partnership for Financial Inclusion has developed a
financial inclusion action plan.4
The Bill & Melinda Gates Foundation’s Financial Services for the Poor
team continues to fund projects across the world to improve access to
financial services for poor households.5
The Alliance for Financial Inclusion (AFI), a global network of financial
policymakers with members from over 90 countries, has been consistently
galvanizing global efforts towards the adoption of proven and innovative
1 See www.worldbank.org/en/programs/globalfindex for more information. Accessed in June 2016.
2 Available here: http://data.imf.org/?sk=E5DCAB7E-A5CA-4892-A6EA-598B5463A34C. Accessed in June 2016.
3 Available here: http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-
Operations/Financial_Inclusion_in_Africa.pdf. Accessed in June 2016.
4 The latest version is available here:
www.gpfi.org/sites/default/files/documents/2014_g20_financial_inclusion_action_plan.pdf. Accessed in June
2016.
5 See www.gatesfoundation.org/What-We-Do/Global-Development/Financial-Services-for-the-Poor for more
information. Accessed in June 2016.
Page 17
financial inclusion policy solutions that improve access of the world’s two
billion unbanked people to financial services. At AFI’s Annual Global Policy
Forum in Riviera Maya, Mexico in 2011, some member countries specifically
made measurable commitments on financial inclusion in what is now called
the “Maya Declaration”.
At AFI’s Global Policy Forum in Maputo, Mozambique in September 2015,
member countries adopted the “Maputo Accord” as an addition to the
“Maya Declaration”. The Accord formalizes the AFI Network’s commitment to
financing small and medium enterprises (SMEs) in recognition of the impact
of the subsector to the global economy and encourages member countries
to specifically define targets for SME finance in their respective country
strategies.6
1.2. Overview of the National Financial Inclusion Strategy
In 2010, Enhancing Financial Innovation & Access (EFInA) conducted the
Access to Financial Services Survey, which revealed that roughly 31 million
(36.3 per cent) out of an adult population of 85 million Nigerians were served
by formal financial services (see Figure 1) compared with 68 per cent in South
Africa and 41 per cent in Kenya (Central Bank of Nigeria, 2012a).
Figure 1: Financial Inclusion Status in Nigeria, 2010
Source: EFInA (2010)
The major barriers to financial services as listed in the study included irregular
income or unemployment, long distance to access points and high
transportation costs, low financial literacy and trust in the financial sector,
high cost of financial services and cumbersome documentation
requirements. On 23rd October 2012, the Nigerian financial sector launched
the National Financial Inclusion Strategy. The Strategy provides initiatives to
address the barriers and set a clear agenda for increasing both access to
and usage of financial services in Nigeria. It targets to reduce adult financial
exclusion from 46.3% in 2010 to 20% by 2020.
6 The report of AFI’s 2015 Global Policy Forum is available here: http://www.afi-
global.org/publications/1959/2015-Global-Policy-Forum-GPF-Report-Inspiring-Innovation-to-Advance-
Inclusion. Accessed in June 2016.
Page 18
The Strategy stated that the proportion of adult Nigerians with access to
formal payments, savings, credit, insurance, and pensions services should
increase to 70, 60, 40, 40, and 40 per cent, respectively, by 2020. Pursuant to
this, the number of bank branches, microfinance bank branches, ATMs, POS
devices and agents per 100,000 adults was targeted to increase from 6.8 to
7.6, 2.9 to 5.0, 11.8 to 59.6, 13.3 to 850.0, and from 0 to 62.0, respectively,
between 2010 and 2020 (see Table 3).
Table 3: Nigeria’s National Financial Inclusion Targets
2010 Baseline 2015 2020
% of total
adult
population
Payments 22% 53% 70%
Savings 24% 42% 60%
Credit 2% 26% 40%
Insurance 1% 21% 40%
Pensions 5% 22% 40%
Units per
100,000
adults
Bank Branches 6.8 7.5 7.6
MFB Branches 2.9 4.5 5.0
ATMs 11.8 42.8 59.6
POS 13.3 442.6 850.0
Mobile Agents 0.0 31.0 62.0
% of
Population
KYC ID 18% 59% 100%
Source: Central Bank of Nigeria (2012a)
The key stakeholders that would shoulder the responsibility for
implementation of the Strategy were identified and categorized as follows:
1. Providers: These are institutions that provide financial products and
services, their partner infrastructure and technology. They include
banks, other financial intuitions, mobile money operators, insurance
firms and technology/telecommunications firms.
2. Enablers: These are institutions responsible for setting regulations and
policies with regard to financial inclusion, such as regulators and
public institutions.
Page 19
3. Supporting Institutions: These are institutions that can provide
technical services, funding, and other assistance for driving financial
inclusion activities, such as development partners and experts.
4. Clients: These include individuals, micro, small and medium
enterprises who use financial services.
1.3. Overview of Financial Inclusion Developments in Nigeria since 2012
Since the launch of the National Financial Inclusion Strategy, high level
commitment to implementation has been demonstrated by financial services
providers/regulators, government agencies, industry apex associations, and
development partners.
Specialized units/divisions/offices have been set up by some stakeholders to
drive financial inclusion programmes, while necessary regulations/guidelines
for services providers have been rolled out.
The Central Bank of Nigeria has:
1. Transformed existing Know Your Customer (KYC) regulations into a
simplified risk-based three-tiered framework that allows individuals
who do not currently meet formal identification requirements to
enter the banking system.
2. Developed and commenced the implementation of a Regulatory
Framework for Agent Banking to enable financial institutions bring
banking services to the unbanked in all parts of the country.
3. Developed and is implementing a National Financial Literacy
Framework to increase awareness and understanding of financial
products and services, with the ultimate goal of increasing
sustainable usage.
4. Commenced the process of developing a comprehensive
Consumer Protection Framework to safeguard the interest of clients
and sustain confidence in the financial sector.
5. Continued the pursuance of Mobile Payment Systems and other
Cash-less Policies to reduce the cost and increase the ease of
financial services and transactions.
6. Sustained the implementation of various Credit Enhancement
Schemes/Programmes to empower micro, small, and medium
enterprises.
In addition, specific financial inclusion activities have been undertaken by
agencies as follows:
Page 20
1. Development of a draft guideline on micro pensions to include the
informal sector in the pension scheme and establishment of a
department to pursue micro pension programmes by the National
Pension Commission (PenCom).
2. Review of Microinsurance Guidelines to allow the licensing of
standalone microinsurance operators and implementation of
Takaful and Microinsurance Guidelines by the National Insurance
Commission (NAICOM).
3. Extension of deposit insurance coverage to subscribers of mobile
money operators to engender confidence in the mobile payment
services by the Nigeria Deposit Insurance Corporation (NDIC).
4. Development and implementation of a 10-year Capital Market
Master Plan to promote awareness on opportunities in the capital
market and on how to take advantage of them by the Securities
and Exchange Commission (SEC).
5. Intensification of efforts to harmonize the Nigerian Identity
Management Framework to provide unique identification for
Nigerians by the National Identity Management Commission
(NIMC).
In addition to the above, government ministries such as the Federal Ministries
of Finance, Information, Education, Women Affairs and Youth have shown
strong will to partner with stakeholders to support financial inclusion drives.
Implementation efforts by stakeholders have contributed in no small measure
to financial inclusion in Nigeria, with the financial exclusion rate declining
from 46.3 to 39.5 per cent between 2010 and 2014 (EFInA, 2014).
Page 21
CHAPTER TWO
2. IMPLEMENTATION ENVIRONMENT
This chapter describes the implementation environment of the National
Financial Inclusion Strategy in 2015. It focuses on the macroeconomic
environment as well as several sectors of the Nigerian economy which are
relevant to financial inclusion. It concludes with a description of the
governing structure for the implementation of the National Financial Inclusion
Strategy.
2.1. Macroeconomic Environment
The Nigerian economy witnessed modest economic growth in 2015. Data
from the National Bureau of Statistics (NBS) showed that Gross Domestic
Product (GDP), measured at 2010 constant basic prices, stood at N69.0 trillion
in 2015. This indicated a growth rate of 2.8 per cent, compared with 6.2 per
cent recorded in 2014. The trade sector grew by 5.1 per cent followed by
services, construction and the agricultural sector at 4.5, 4.4 and 3.7 per cent,
respectively. However, the industry sector declined by 3.4 per cent,
compared to the level in 2014. Non-oil GDP grew at 3.8 per cent which was
higher than the overall GDP growth rate for 2015 but lower than the 7.2 per
cent growth rate recorded by the non-oil sector in 2014 (see Table 4).
Table 4: Sectoral Growth Rates of GDP at 2010 Constant Basic Prices
Activity Sector 2011 2012 2013 2014 2015
1. Agriculture 2.9 6.7 2.9 4.3 3.7
2. Industry 7.0 1.2 -0.1 6.0 -3.4
3. Construction 15.7 9.4 14.2 13.0 4.4
4. Trade 7.2 2.2 6.6 5.9 5.1
5. Services 4.1 5.0 9.4 7.1 4.5
TOTAL (GDP) 5.3 4.2 5.5 6.2 2.8
NON-OIL (GDP) 5.9 5.8 8.4 7.2 3.8
Sectoral Growth Rates of GDP at 2010 Constant Basic Prices
(Per cent)
Source: Reports of the National Bureau of Statistics (NBS)
The overall increase in domestic output in 2015 was attributed to the
economic reform programmes of the Federal Government in some sectors,
particularly growth in the telecommunications sub-sector as well as an
increase in agricultural output. However, GDP growth was moderated by the
continued volatility of the global oil price which resulted in a sharp decline in
fiscal revenues. Other factors that moderated GDP growth in the period
under review included increased cost of transportation due to recurring fuel
scarcity, insurgency and exchange rate challenges.
Page 22
In 2015, the average inflation rate, at 9.0 per cent, was contained within the
single digit target. This development was attributed largely to induced fiscal
constraint and tight monetary stance adopted by the Central Bank of
Nigeria. A trend analysis of the movement in headline inflation during the
year indicated a steady rise from 8.2 per cent in January to 8.5 per cent in
March and further rose to 9.2, 9.4 and 9.6 per cent in June, September and
December, 2015, respectively. This development was attributed to the rise in
prices of various food and non-food items arising from increases in the cost of
transportation, shortages in the supply of goods as a result of persistent fuel
scarcity, increased cost of consumables arising from foreign exchange pass
through and insurgency in the north-eastern part of the country.
In the foreign exchange market, the annualized average exchange rate of
the naira to the US dollar at the interbank and bureau de change (BDC)
segments in 2015 were N195.52/US$ and N222.75/US$, representing a
depreciation of 15.6 and 22.8 per cent, respectively, compared to the levels
attained in 2014. Thus, the premium between the annual average
interbank/BDC rates in 2015 was 13.9 per cent, exceeding the internationally
accepted benchmark of 5.0 per cent.
Overall, as a result of lower economic growth in 2015 than in previous years,
the macroeconomic environment provided less support to financial inclusion
in 2015 compared with previous years.
2.2. Banking Sector
The structure of the financial system in 2015 comprised the Central Bank of
Nigeria, the Federal Mortgage Bank of Nigeria (FMBN), and twenty-five (25)
banks comprising twenty (20) commercial banks, four (4) merchant banks
and one (1) non-interest bank. Others were one (1) discount house, nine
hundred and fifty-eight (958) microfinance banks, sixty-six (66) finance
companies, thirty-five (35) primary mortgage banks, one (1) mortgage
refinance company, and six (6) development finance institutions. Two banks,
Enterprise and Mainstreet banks, were acquired by Heritage and Skye banks,
respectively, during the year, while SunTrust bank Ltd was issued a
commercial banking licence.
Loans and advances increased slightly by 0.7 per cent to N12.3 trillion at end-
December 2015, compared with a growth of 82.3 per cent at end-December
2014. Total assets of the banking sector increased marginally by 2.9 per cent
from N27.6 trillion at end-December 2014 to N28.4 trillion at end-December
2015. From 2013 to 2014, total assets had grown by 12.7 per cent. Total
deposit liabilities grew by 13.8 per cent from N15.2 trillion in end-December
2014 to N17.3 trillion by end-December 2015. This was a stronger growth than
the 10.2 per cent growth from 2013 to 2014. While credit from the Central
Bank increased significantly from N224.6 billion to N732.2 billion from end-
Page 23
December 2014 to end-December 2015, foreign assets decreased
substantially from N969.5 billion to N108.0 billion (see Table 5).
Table 5: Statistics of the Banking Sector, Data in Million Naira
2011 2012 2013 2014 /1 2015 /2
Item
Reserves /3
1,756,449.24
3,481,412.44
3,794,118.56
5,522,612.24
5,097,605.47
Aggregate Credit (Net) 12,878,259.06 13,424,886.00 12,207,717.51 16,437,093.55 18,091,452.53
Loans and Advances 6,489,761.77 6,833,636.59 6,677,225.03 12,175,750.47 12,262,502.40
Total Assets
19,396,633.76
21,303,951.77
24,468,368.48
27,581,647.55
28,369,031.69
Total Deposit Liabilities
11,452,763.25
13,135,887.35
13,825,188.77
15,234,775.34 17,343,986.35
Demand Deposits
4,920,850.24
5,072,986.00
5,169,063.97
4,668,215.23
5,885,856.53
Time, Savings &
Foreign Currencies
Deposits
6,531,913.01
8,062,901.35
8,656,124.80
10,566,560.11
11,458,129.82
Foreign Assets (Net)
1,314,878.51
1,650,121.00
1,614,722.37
969,549.18
107,999.86
Credit from Central Bank
294,984.06
228,036.25
262,170.55
224,581.43
732,244.52
Capital Accounts
3,682,121.44
3,640,682.01
3,915,405.55
4,269,522.17
5,051,419.96
Capital & Reserves
2,486,966.78
2,408,141.11
2,649,166.02
2,963,361.18
3,470,957.43
Other Provisions
1,195,154.66
1,232,540.90
1,266,239.52
1,306,160.99
1,580,462.52
Source: Central Bank of Nigeria /1 Revised
/2 Provisional
/3 Includes CBN bills held by Deposit Money Banks
2.3. Microfinance Bank Sector
The number of microfinance banks, following the issuance of additional 45
licenses during the year under review, rose to 958 at end-December 2015,
compared with 913 in 2014, while there was one (1) non-interest
microfinance bank at the end of 2015.
Total assets within the microfinance industry rose to N343.9 billion in 2015 from
N300.7 billion recorded in December 2014, representing a growth of 14.4 per
cent above the level attained in 2014. This was a higher growth rate than the
11.0 per cent recorded in 2014. Similarly, deposit liabilities within the sector
increased by 9.3 per cent from N145.8 billion in 2014 to N159.5 billion as at
end-December 2015. Again, compared with the growth rate in 2014 (7.3 per
cent), higher growth was attained in 2015. Loans and advances also rose
from N162.9 billion in 2014 to N173.7 billion at end-December 2015,
Page 24
representing an increase of 6.6 per cent during the period under review,
while investments grew by 12.4 per cent from N15.8 billion in 2014 to N17.7
billion in 2015 (see Table 6).
Table 6: Statistics of the Microfinance Sector
Item 2011 2012 2013 2014 2015 /1
Number of Licensed MFBs 873 879 820 913 958
Number of Reporting MFBs 474 566 820 679 684
Capital and Reserves (Million Naira) 29,094.80 53,282.13 72,963.74 91,008.80 91,376.50
Total Assets (Million Naira) 117,872.10 222,766.59 270,896.14 300,731.10 343,883.10
Deposit Liabilities (Million Naira) 59,375.90 132,154.70 135,918.73 145,830.02 159,453.50
Loans & Advances (Net) (Million Naira) 50,928.30 96,971.56 129,026.97 162,904.99 173,673.00
Investments (Million Naira) 8,959.80 14,529.43 14,703.04 15,785.58 17,737.90
Source: Central Bank of Nigeria /1 Provisional
2.4. E-Payments Sector
In August 2011, the Central Bank of Nigeria approved the Guidelines on
Point-of-Sale (PoS) Card Acceptance Services, which amongst others,
mandated the Nigeria Inter-Bank Settlement System Plc (NIBSS) to act as the
Payments Terminal Service Aggregator (PTSA) for the financial system. The
Nigeria Inter-Bank Settlement System, established by the Central Bank of
Nigeria (CBN) and the Bankers’ Committee, provides the infrastructure for
automated processing, settlement of payments and fund transfer instructions
between banks and card companies in Nigeria. Eleven (11) Payment
Terminal Service Providers (PTSPs) are currently licensed by the CBN to offer
services to acquirers, covering all aspects relating to terminal management
and support.
In April 2015, the Central Bank of Nigeria released the Guidelines on Mobile
Money Services in Nigeria to address business rules governing the operation
of mobile money services, and to specify basic functionalities of mobile
payment services and solutions.
A trend analysis of volume and value of electronic transactions underlines
the increasing importance of electronic transaction channels and a shift from
the traditional to an electronic payment system. In terms of volume, the
number of electronic transactions amounted to 655 million in 2015 compared
to 556 million in 2014, representing an increase of 18 per cent (Figure 2).
Page 25
Figure 2: Volume (Number) of Electronic Transactions, 2012 to 2015, in Million
Source: Central Bank of Nigeria
Similarly, the value of electronic transactions increased from N51,120 billion in
2014 to N56,317 billion in 2015, indicating an increase of 10 per cent (Figure
3).
Figure 3: Value of Electronic Transactions, 2012 to 2015,
in Billion Naira
Source: Central Bank of Nigeria
Further insights into the trend of volume and value from 2012 to 2015, by
electronic transaction channel, are indicated in Tables 7 and 8 below.
428 385
556 655
2012 2013 2014 2015
27,227
36,108
51,120 56,317
2012 2013 2014 2015
Page 26
Table 7: Volume (Number) of Electronic Transactions, 2012 to 2015, by Electronic
Transaction Channel
Transaction
Channel7 2012 2013 2014 2015
Compound
Annual
Growth
Rate 2012-
20158
ATM 375,513,154
(87.7%)9
295,416,724
(76.8%)
400,269,140
(72.0%)
433,695,748
(66.3%)
4.9%
NIP 4,449,654
(1.0%)
17,112,158
(4.4%)
40,829,854
(7.3%)
71,223,545
(10.9%)
152.0%
Mobile
Payments
2,297,688
(0.5%)
15,930,181
(4.1%)
27,744,797
(5.0%)
43,933,362
(6.7%)
167.4%
PoS 2,587,595
(0.6%)
9,418,427
(2.4%)
20,817,423
(3.7%)
33,720,933
(5.2%)
135.3%
NEFT 28,941,559
(6.8%)
29,834,317
(7.8%)
29,690,765
(5.3%)
28,935,605
(4.4%)
0.0%
Cheques 12,161,694
(2.8%)
14,211,078
(3.7%)
15,283,933
(2.7%)
13,466,461
(2.1%)
3.5%
Internet
Banking
2,276,464
(0.5%)
2,900,473
(0.8%)
5,567,436
(1.0%)
7,981,361
(1.2%)
51.9%
E-Bills Pay - 557
(0.0%)
593,579
(0.1%)
1,208,556
(0.2%)
103.6%
Remita - - 15,029,627
(2.7%)
19,417,371
(3.0%)
29.2%
Central
Pay
- - 1,384
(0.0%)
66,031
(0.0%)
-
NAPS - - - 936,667
(0.1%)
-
Total 428,227,808
(100.0%)
384,823,915
(100.0%)
555,827,938
(100.0%)
654,585,640
(100.0%)
15.2%
Source: Central Bank of Nigeria
The data revealed that ATM transactions accounted for the largest segment
of the total number of electronic transactions as it recorded 66.3 per cent of
the total volume of electronic transactions (see Table 7).10 Furthermore, the
number of ATM transactions grew by eight per cent between 2014 and 2015,
while the ATM share of the total number of electronic transactions decreased
7 Please note that cheques only include clearing cheques and only inter-bank transactions are being
considered. Similarly, figures provided for NEFT, ATM, Internet Banking, and NIP are based on inter-bank
transactions only. Mobile Payments, E-Bills Pay, PoS, Remita, Central Pay and NAPS, in contrast, include both
inter- and intra-bank transactions. For more information on the different channels, please visit the website of
the Nigeria Inter-Bank Settlement System at: http://www.nibss-plc.com.ng/. Accessed in June 2016.
8 For E-Bills Pay and Remita from 2014 to 2015 only.
9 Percentages in parentheses refer to the share of the total number of electronic transactions made in the
respective year. 10 However, the data captured also covers ATM inter-bank withdrawals and not only money transfers from
one party to another.
Page 27
from 72.0 to 66.3 per cent in the same period. In 2012, the ATM share of the
total number of electronic transactions had accounted for 87.7 per cent. This
implies that while the ATM channel remained by far the most relevant
channel in terms of volume of electronic transactions in 2015, its importance
decreased relative to other channels since 2012.
Transactions through NIP (NIBSS Instant Payment) increased by 74 per cent
from 40.8 million in 2014 to 71.2 million in 2015. The share of NIP transactions of
total electronic transactions grew from 7.3 to 10.9 per cent, making this
channel the second most relevant in 2015. E-Bills Pay, PoS (Point-of-Sale),
mobile payments, internet banking, and Remita increased by 104, 62, 58, 43,
and 29 per cent from 2014 to 2015, respectively. Their respective shares rose
to 0.2, 5.2, 6.7, 1.2, and 3.0 per cent in 2015, respectively, indicating that while
these channels are gaining importance relative to other channels, their
shares were still small. The number of transactions through cheques and NEFT
(NIBSS Electronic Fund Transfer) decreased from 2.7 to 2.1 per cent, and from
5.3 to 4.4 per cent, respectively, between 2014 to 2015. NAPS (NIBSS
Automated Payment Services) and Central Pay were recently introduced
and still account for less than 0.2 per cent of the total volume of electronic
transactions in 2015.
Examining the trend since 2012, it can be observed that the increase in the
share of total volume of electronic transactions was largest for mobile
payments, NIP, and PoS, the compound annual growth rate accounting for
more than 100 per cent between 2012 and 2015.
Compared to the share of total volume of 72.0 and 66.3 per cent in 2014 and
2015, the ATM share of total value of transactions decreased marginally from
7.2 per cent in 2014 to 7.1 per cent in 2015 (see Table 8). As for volume, this
similarly indicates that ATMs’ significance for the value of electronic
transactions is decreasing relative to other channels. However, the absolute
level of the ATM share is substantially lower when it comes to value,
highlighting that the average amount in Naira of transactions made through
an ATM is low. This is likely because ATMs are used more by individuals than
firms as individuals are expected to make transactions of smaller amounts
than firms.
In contrast, NIP, NEFT, Remita, and cheques had substantially higher shares in
terms of value than in terms of volume of total transactions, implying that
fewer but more valuable transactions are made through these four channels.
In line with the trend for volume, the share of total value of NIP grew from 39.0
per cent (N19.9 trillion) in 2014 to 45.4 per cent (N25.5 trillion) in 2015, making
it the most relevant channel in terms of value in 2015. In 2012, its share had
only accounted for 14.3 per cent. NEFT’s share of total value, on the contrary,
decreased from 28.5 per cent to 23.2 per cent between 2014 and 2015. In
2012, its share had still accounted for more than 50 per cent.
Page 28
Table 8: Nominal Value of Electronic Transactions, 2012 to 2015, by Electronic
Transaction Channel, in Billion Naira
Transaction
Channel11 2012 2013 2014 2015
Compounded
Annual
Growth Rate
2012-201512
ATM 1,985
(7.3%)13
2,831
(7.8%)
3,682
(7.2%)
3,972
(7.1%)
26.0%
NIP 3,890
(14.3%)
10,849
(30.0%)
19,921
(39.0%)
25,541
(45.4%)
87.3%
Mobile
Payments
32
(0.1%)
143
(0.4%)
339
(0.7%)
442
(0.8%)
139.9%
PoS 48
(0.2%)
161
(0.4%)
312
(0.6%)
449
(0.8%)
110.7%
NEFT 13,753
(50.5%)
14,368
(39.8%)
14,564
(28.5%)
13,087
(23.2%)
-1.6%
Cheques 7,487
(27.5%)
7,709
(21.3%)
7,269
(14.2%)
6,195
(11.0%)
-6.1%
Internet
Banking
32
(0.1%)
47
(0.1%)
74
(0.1%)
92
(0.2%)
42.2%
E-Bills Pay - 0
(0.0%)
44
(0.1%)
217
(0.4%)
393.2%
Remita - - 4,914
(9.6%)
6,223
(11.1%)
26.6%
Central
Pay
- - 0
(0.0%)
0
(0.0%)
-
NAPS - - - 99
(0.2%)
-
Total 27,227
(100.0%)
36,108
(100.0%)
51,120
(100.0%)
56,317
(100.0%)
27.4%
Source: Central Bank of Nigeria
While Remita’s share increased from 9.6 per cent in 2014 to 11.1 per cent in
2015, the share of cheques in terms of value decreased from 14.2 per cent in
2014 to 11.0 per cent in 2015, extending the declining trend of relevance of
cheques since 2012.
For PoS, mobile payments, internet banking and E-Bills Pay, value increased in
line with the trend for volume. While the value of E-Bills Pay almost increased
by a factor of five between 2014 and 2015, PoS accounted for the highest
11 Please note that cheques only include clearing cheques and only inter-bank transactions are being
considered. Similarly, figures provided for NEFT, ATM, Internet Banking, and NIP are based on inter-bank
transactions only. Mobile Payments, E-Bills Pay, PoS, Remita, Central Pay and NAPS, in contrast, include both
inter- and intra-bank transactions. For more information on the different channels, please visit the website of
the Nigeria Inter-Bank Settlement System at: http://www.nibss-plc.com.ng/. Accessed in June 2016. 12 For E-Bills Pay and Remita from 2014 to 2015 only. 13 Percentages in parentheses refer to the share of total number of electronic transactions made in the
respective year.
Page 29
growth rate of the other three channels in terms of value from 2014 to 2015.
The respective shares of total value of transactions, however, remained
below one per cent in 2015 for all the four channels and the value shares
were significantly lower than the respective volume shares for PoS, mobile
payments and internet. This indicates that the average amount in Naira of
transactions made through PoS, internet banking and mobile payments was
lower than the average amount of transactions made through other
channels. This is likely because the channels are relatively more common
among individuals than corporations.
2.5. Insurance Sector
The Nigerian insurance industry comprises Life, Non-Life (General) and
Composite insurance businesses. There are presently 57 insurers, two
reinsurers, 478 insurance brokers, 3,300 agents and 48 loss adjusters. The gross
premium of the industry stood at N304.1 billion at end-December 2015, which
indicated a 7.0 per cent increase from N284.2 billion in 2014. The life
insurance sub-sector grew more strongly than the non-life insurance sector in
terms of gross premium since 2009, as the life insurance’s share of total gross
premium increased from 19 per cent in 2009 to 30 per cent in 2015 (see Table
9).
Table 9: Industry Gross Premium by Insurance Type and Growth Rate, 2009 to 2015
Year
Non-Life Gross
Premium
(N Million)
Life Gross
Premium
(N Million)
Industry Gross Premium
(N Million)
Growth Rate of
Industry Gross
Premium (Year
on Year)
2009 153,127.12 36,833.33 189,960.45 -
2010 157,336.81 43,039.17 200,375.98 5.5%
2011 175,756.76 57,996.13 233,752.89 16.7%
2012 193,493.25 64,909.06 258,402.30 10.5%
2013 196,008.76 80,520.24 276,529.00 7.0%
2014 198,546.85 85,655.93 284,202.78 2.8%
2015 212,445.13 91,651.85 304,096.98 7.0%
Source: Returns from the National Insurance Commission
To complement the drive for increased insurance penetration and promote
inclusive insurance participation in Nigeria, the National Insurance
Commission (NAICOM) introduced the Microinsurance and Takaful Insurance
models in Nigeria. “Takaful” is an Arabic word that represents a practice
whereby individuals in a community jointly guarantee themselves against any
loss or damage.
2.6. Pension Sector
Since the implementation of the 2014 Pension Reform Act, total pension
contributions by both the public and private sectors into the Retirement
Page 30
Savings Account of employees grew to N3.43 trillion as at the end of 2015.
Total annual contributions during the year of 2015 amounted to N558.96
billion, indicating a decrease of 3.9 per cent versus 2014. The decrease was
due to the decline in public sector contributions, which fell by 15.9 per cent
from N237.76 billion in 2014 to N200.05 billion in 2015, while private sector
contributions increased by 4.3 per cent from N343.97 billion to N358.91 billion
during the same period (see Table 10).
Table 10: Annual Pension Contributions from 2004 to 2015, by Sector, by Sector, in
Billion Naira
Year Public Sector
Contributions
Private Sector
Contributions Total Contributions
Growth Rate of
Contributions
(Year on Year)
2004 15.60 - 15.60 -
2005 34.68 - 34.68 122.3%
2006 37.38 23.03 60.41 74.2%
2007 80.63 68.34 148.97 146.6%
2008 99.28 80.81 180.09 20.9%
2009 137.10 91.21 228.31 26.8%
2010 162.46 103.03 265.49 16.3%
2011 228.92 119.53 348.45 31.2%
2012 331.14 174.43 505.57 45.1%
2013 278.50 225.42 503.92 -0.3%
2014 237.76 343.97 581.73 15.4%
2015 200.05 358.91 558.96 -3.9%
Total 1,843.50 1,588.68 3,432.18 -
Source: National Pension Commission (2016)
The pension sector automated monthly payments for pensioners under the
old defined benefit scheme. The Supervising Government parastatal, the
Federal Ministry of Finance, recently established a new oversight department,
the Pension Transitional Arrangement Directorate (PTAD), with the primary
objective of strengthening the pension system.
2.7. Capital Market Sector
The number of listed securities increased from two hundred and fifty-three
(253) in 2014 to two hundred and fifty-seven (257) in 2015, while the number
of listed companies declined to one hundred and eighty-four (184), from one
hundred and eighty-nine (189) in 2014. Similarly, the number of listed bonds
increased to sixty (60), above the fifty-two (52) recorded in the preceding
year, while the number of listed equities decreased to one hundred and
ninety (190) from one hundred and ninety-seven (197) at end-December
2014.
Available data on the activities of the Nigerian Stock Exchange (NSE)
reflected the prevalence of bearish sentiments in 2015, as major market
Page 31
indicators generally trended downwards. Aggregate volume and value of
traded stocks declined by 14.4 and 29.0 per cent, respectively, at end-
December 2015.
As Table 11 shows, aggregate market capitalization of the 257 listed securities
rose marginally by 0.8 per cent to close at N17.0 trillion, compared with N16.9
trillion recorded at end-December 2014. The increase was attributed wholly
to the significant rise in the market capitalization of listed bonds. Market
capitalization of the 190 listed equities fell significantly by 14.1 per cent from
N11.5 trillion in 2014 to close at N9.9 trillion, and constituted 58.0 per cent of
the aggregate market capitalization, compared with 68.0 per cent in the
preceding year. The development was attributed to the effect of persistent
bearish sentiments due to a combination of uncertainties in global oil prices
and increasing currency risk.
Efforts to ensure that the Nigerian Stock Exchange (NSE) continued to serve
as a platform for promoting Africa’s biggest companies and influencing
economic growth of Nigeria were sustained in 2015. To this end, the
Exchange launched a new listing platform – the Premium Boards and the
associated Premium Board Index. The NSE Pension Index was also launched
with constituents that meet certain criteria. The index would serve as a
performance benchmark for Pension Asset Managers, Non-Pension Asset
Managers and investors and help the National Pension Commission monitor
compliance and performance of equities portfolios held by Pension
Managers. Other activities of the NSE during the year included the conclusion
of the appointment of the consortium of financial advisers and legal
consultants as well as tax advisers for the ongoing demutualisation process.
Table 11: Indicators of Capital Market Developments in the Nigerian Stock
Exchange, 2011 to 2015
Source: Returns from the Securities and Exchange Commission
2011 2012 2013 2014 2015
Number of Listed Securities 250 256 254 253 257
Volume of Stocks Traded (Turnover Volume) (Billion) 90.7 104.2 267.3 108.47 92.9
Value of Stocks Traded (Turnover Value) (Billion Naira) 638.9 809.0 2350.9 1338.6 950.4
Value of Stocks Traded/GDP (%) 1.0 1.1 2.9 1.5 1.0
Total Market Capitalisation (Billion Naira) 10,275.3 14,800.9 19,077.4 16,875.1 17,003.4
Of which: Banking Sector (Billion Naira) 1,839.3 2,251.3 2,939.9 2,367.0 1,447.6
Total Market Capitalisation/GDP (%) 16.06 20.40 23.51 19.00 18.0
Of which: Banking Sector/GDP (%) 1.8 3.1 3.62 2.7 1.5
Banking Sec. Cap./Market Cap. (%) 17.9 15.2 15.4 14.0 8.5
Annual Turnover Volume/Value of Stock (%) 14.2 12.9 11.4 8.1 9.8
Annual Turnover Value/ Total Market Capitalisation (%) 6.2 5.5 12.3 7.9 5.6
NSE Value Index (1984=100) 20,730.6 28,078.8 41,329.2 34,657.2 28,642.3
Growth (In percent)
Number of Listed Securities -5.3 2.4 -0.78 -0.004 0.016
Volume of Stocks -2.8 14.9 156.5 -59.4 -14.4
Value of Stocks -19.9 26.6 190.6 -43.1 -29.0
Total Market Capitalisation 3.6 44.0 28.9 -11.5 0.8
Of which: Banking Sector -32.1 22.4 30.6 -19.5 -38.8
Annual Turnover Value -21.9 5.7 11.4 -43.1 -29.0
NSE Value Index -16.3 35.5 47.2 -16.1 -17.4
Share of Banks in the 20 Most Capitalised Stocks in the NSE (%) 40.0 45.0 30.0 -19.5
Table 4.14: Indicators of Capital Market Developments in the Nigerian Stock Exchange (NSE), 2011 - 2015
Page 32
2.8. Informal Financial Sector
Informal financial services are common in Nigeria. As at 2014, 16.7 per cent of
the adult population or 15.6 million adults were found to have savings with
informal institutions, such as cooperatives, savings groups or village
communities, only. Specifically, 10.6 per cent of adult Nigerians were found
to save with savings groups or clubs, 10.0 per cent with savings collectors,
and 5.4 per cent with village or community associations. Similarly, 1.8 per
cent of the adult Nigerian population borrowed from savings groups or clubs
and 1.3 per cent from money lenders (EFInA, 2014). While the latter numbers
may not appear high at first glance, given the very low credit penetration in
Nigeria, the informal financial sector is relevant for the provision of both
saving and credit services, and can act as an important link between the
financially excluded population and the formal financial sector.
2.9. National Financial Inclusion Governance Structure
In order to oversee and ensure successful implementation of the planned
strategies, two Governing Committees and four Financial Inclusion Working
Groups were established in 2015.
2.9.1. National Financial Inclusion Steering Committee
Chaired by the CBN Governor, the Steering Committee comprises the Heads
of relevant Ministries, Departments and Agencies (MDAs) and Industry
Associations (see Appendix 1). The Committee’s mandate is to provide high
level policy and strategic direction for the implementation process. It meets
bi-annually, provides high level buy-in from stakeholders, formalizes an
audience that provides feedback on progress against milestones and drives
key decision making. The Head of the Financial Inclusion Secretariat serves as
the Secretary to the Steering Committee.
2.9.2. National Financial Inclusion Technical Committee
Chaired by the CBN Deputy Governor, Financial System Stability, the National
Financial Inclusion Technical Committee comprises CBN Directors as well as
equivalents within relevant Ministries, Departments and Agencies, and
Industry Associations (see Appendix 1). The Committee provides technical
support and validates data supplied on financial inclusion. It meets quarterly,
serves as the advisory body to the Steering Committee and supports the day-
to-day activities of the Secretariat. Its five key mandates include but are not
limited to:
Providing technical support for the overall implementation of the
Strategy.
Discussing progress and challenges of respective organizations in
reaching financial inclusion goals.
Page 33
Providing oversight function to the Financial Inclusion Secretariat to
ensure that high-quality data on national financial inclusion, reflective
of the industry and the country, is supplied on a regular basis.
Providing updates to the respective Management/Directors of
represented organizations and government institutions.
Providing recommendations to the Steering Committee on the
implementation of the Strategy.
The Head of the Financial Inclusion Secretariat serves as the Secretary to the
Technical Committee.
2.9.3. National Financial Inclusion Working Groups
A major outcome of the Inaugural National Financial Inclusion Technical
Committee Meeting was the inauguration of four Working Groups (see
Appendix 1) as follows:
• Financial Inclusion Channels Working Group (FICWG): To address
implementation issues on financial access points (e.g. branches, ATMs,
agents) and their dispersion across the country.
• Financial Literacy Working Group (FLWG): To address the financial
capability of consumers in order to improve their understanding of
concepts and risks associated with financial products and services. This
Working Group was established as a merger of the former Financial
Literacy Committee and four additional institutions.
• Financial Inclusion Products Working Group (FIPWG): To address
implementation issues on financial products and services, such as scaling
up the adoption of savings, electronic payments, credit, insurance, and
pension schemes.
• Financial Inclusion Special Interventions Working Group (FISIWG): To
address implementation issues related to women, the youth and people
with disabilities (PWD) in order to enhance their access to financial
products and services.
Key deliverables of the Working Groups in 2015 included the following:
• Financial Inclusion Channels Working Group:
o Implementation of the Shared Agent Network (Licensing of Super
Agents to drive the implementation of the Shared Agent Network)
o Pursuit of guidelines for the Bancassurance initiative
o Development of distribution channels for the Capital Market
o Deployment of internet access in all 774 Local Government Areas
Page 34
• Financial Literacy Working Group:
o Approval of the National Financial Literacy Framework by the
Management of the Central Bank of Nigeria
o Execution (signing) of the Memorandum of Understanding with the
Nigerian Educational Research and Development Council (NERDC)
for the development and integration of financial literacy in schools’
curricula
o Approval of the findings of the National Financial Literacy Baseline
Survey by the Management of the Central Bank of Nigeria
• Financial Inclusion Products Working Group:
o Approval of the creation of a Department in PenCom to handle
coverage of informal pensions
o Approval of the Framework for the National Collateral Registry by
CBN
o Approval of window microinsurance licenses to 17 insurance
companies by NAICOM
• Financial Inclusion Special Interventions Working Group:
o Development of Terms of Reference for a financial inclusion research
study on people with disabilities
o Launch of a Fashion Fund for women by the Bank of Industry (BOI)
o Engagement with the Office of the Vice President on the financial
inclusion of people with disabilities
2.9.4. Financial Inclusion Secretariat
The Financial Inclusion Secretariat was established in 2013 to run the day-to-
day coordination of, data management of and reporting on the National
Financial Inclusion Strategy (NFIS) implementation process. It comprises two
offices: the Data Management and the Strategy Coordination Office. Its
mandates are to:
Coordinate stakeholder activities aimed at increasing financial
inclusion.
Track and monitor progress on financial inclusion vis-à-vis the targets.
Ensure that appropriate arrangements are made for financial inclusion
data gathering, analysis and publishing of annual progress reports.
Maintain a database of financial inclusion in Nigeria as well as global
trends in financial inclusion.
Page 35
Initiate necessary reviews on the National Financial Inclusion Strategy
and support evidence-based policy making.
Review and revise the roles and responsibilities of stakeholders as
required.
Address capacity building initiatives on financial inclusion issues.
Act as Secretary to the Governing Committees on financial inclusion.
It also coordinates the activities of the four National Financial Inclusion
Working Groups and implements the Digital Financial Inclusion Project, a joint
initiative of the Federal Ministry of Finance, the Bill & Melinda Gates
Foundation and the Central Bank of Nigeria.
Page 36
CHAPTER THREE
3. STRATEGY IMPLEMENTATION PROGRESS
This chapter reviews the progress made in the implementation of the
National Financial Inclusion Strategy with regards to product, channel and
enabler key performance indicators (KPIs).14 A detailed status quo analysis of
the individual initiatives as defined in the National Financial Inclusion Strategy
is provided in Appendix 3.
3.1. Products
Five product key performance indicators, one for each of payments, savings,
credit, insurance, and pensions, are assessed in this section.15 Product key
performance indicators aim to track the percentage of adult Nigerians who
own and use defined financial products.
3.1.1. Electronic Payments
Electronic payments include payments made through debit/ATM cards,
credit cards, the internet, mobile phones as well as through bank tellers or
agents. A bank or a mobile money account is usually necessary to use an
electronic payment channel.
For the economy as a whole, electronic payments can contribute to
economic growth as electronic payments can reduce corruption, increase
efficiency and make monetary policy more effective. At the individual level,
making electronic rather than cash transactions can be safer and more
convenient, and can increase transparency as it allows individuals to track
payments made over a certain period of time.
Key initiatives to drive usage of electronic payment channels among
Nigerian adults, as mentioned in the National Financial Inclusion Strategy,
include the implementation of the tiered KYC requirements, the roll-out of the
Cashless Nigeria Project in all States of the Federation, and programmes to
increase public awareness about mobile payments.
The three-tiered Know Your Customer (KYC) requirements were introduced in
2013 to simplify account opening requirements. The requirements state that
accounts of all three tiers can be opened without any minimum amount.
Additionally, to open a Tier 1 account, it is sufficient to have a passport
photograph, a telephone number and to provide personal information such
14
Please see Appendix 2 for an overview of additional KPI groups and an explanation for inclusion or non-
inclusion in this Report. 15 It should be noted that not all indicators have been measured based on the desired definition due to data
constraints from the supply side at the time of writing. This is why a definition of the proxy indicator has been
included. This is the definition describing how the indicator is being measured from the supply side until
existing data constraints have been removed.
Page 37
as the name, address and place and date of birth. This makes it easier for the
low-income population to open accounts and make electronic payments.16
The Cashless Nigeria Project aims at reducing the amount of physical cash
circulating in the economy by imposing charges on withdrawals above
N500,000 for individuals and N3,000,000 for corporate bodies.17
In 2015, the Central Bank of Nigeria continued to hold several sensitization
campaigns on the three-tiered KYC requirements on television and radio in
order to inform, in particular, the low-income population about the simplified
requirements to open a bank account. Also, the Cashless Nigeria Project was
rolled out in six States plus the Federal Capital Territory and sensitization
campaigns about the Project were held in nine States by the Central Bank of
Nigeria. In order to increase public awareness about mobile payments,
mobile money services were covered as a key topic in sensitization
campaigns by the Central Bank of Nigeria across the country.
In addition to the strategies defined in the NFIS, the Digital Financial Inclusion
Project, a collaboration between the Federal Ministry of Finance, the Bill &
Melinda Gates Foundation and the Central Bank of Nigeria, was inaugurated
in October 2015. It aims to increase the number of adult Nigerians that use
electronic payments through the digitization of government payments,
strengthen the digital payment infrastructure and reduce inefficiencies and
leakages.18
Table 12: Status of the Payments KPI as at December 201519
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Ownership: % of adult
population having a
payment product with
a formal financial
institution
Usage: % of adult
population making
use of electronic
payments through a
formal financial
institution
# of transaction
accounts with a
Deposit Money
Bank or
Microfinance
Bank 22%
67.87m
trans-
action
accounts
73.17m
trans-
action
accounts
53%
(51.0m
adults)
70%
(77.4m
adults)
Source for Actuals: Central Bank of Nigeria
16 More information on the three-tiered KYC requirements is available here:
https://www.cbn.gov.ng/out/2013/ccd/3%20tiered%20kyc%20requirements.pdf. Accessed in June 2016.
17 See https://www.cbn.gov.ng/cashless/ for more information. Accessed in June 2016. 18 See http://www.cbn.gov.ng/FeaturedArticles/2015/articles/CBNPartnersFMFand.asp for more information.
Accessed in June 2016. 19 Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
Page 38
As per the National Financial Inclusion Strategy, 53 per cent of the Nigerian
adult population should have access to and use a formal payment product
by 2015. As a bank or mobile money account is necessary to make an
electronic payment, at least 53 per cent of the Nigerian adult population
should have a bank or mobile money account with a formal financial
institution as at 2015. Realistic measurement towards the achievement of the
defined target depends on the existence of a unique identification of
customers across financial institutions. The full implementation of the Bank
Verification Number (BVN) will be expected to address the issue in future.20
However, Table 12 provides an update on the number of transaction
accounts registered with commercial and microfinance banks. As at
December 2015, there was a total of 67.9 million transaction accounts at
commercial and microfinance banks. This represents an increase of 7.8 per
cent compared to December 2014. Relative to the adult population, there
were 76.1 transaction accounts per 100 adults in December 2015, which
represents an increase of 4.9 per cent relative to the 72.6 transaction
accounts per 100 adults recorded in December 2014.
In the upcoming years, the achievement of the 2020 target of 70 per cent of
the adult population having a formal transaction account and using it for
electronic payments will be enhanced by the continued roll-out of the
Cashless Nigeria Project to all the States of the Federation and the
implementation of the Digital Financial Inclusion Project. Given that even
about 38 per cent of the financially excluded population own a mobile
phone (EFInA, 2014), the adoption of mobile money also needs to be further
promoted.
3.1.2. Savings
Savings enable individuals to set aside money for future consumption in
periods of lower income or higher unexpected expenditures. Savings also
allow individuals to make investments, such as a sewing machine for a micro
entrepreneur, additional fertilizer for a farmer or a university course for a
student. Compared to informal means of savings, saving at a formal financial
institution can be safer as deposits are insured up to a limit by the Nigeria
Deposit Insurance Corporation (NDIC) and more valuable because of
interest earnings. At a macroeconomic level, savings can lead to higher
productivity and economic growth if they are invested within the country.
In view of the above, the National Financial Inclusion Strategy defined
several initiatives to drive the achievement of the target for savings, including
20 Also, additional data, such as the number of mobile money accounts and the number of accounts held by
individuals and corporate bodies, needs to be collected to compute the desired indicator.
Page 39
the introduction and promotion of a basic “no frills” savings account21, the
implementation of the tiered KYC requirements, the implementation of a
national savings mobilization programme and policies to support linkages to
informal savings groups.
In 2015, the Central Bank of Nigeria held sensitization campaigns about the
KYC requirements and financial institutions applied the requirements. Also,
the Central Bank of Nigeria initiated a tender process for a study on a
national savings mobilization programme. The evaluation process of the
proposals received is ongoing at the time of writing. Linkages between
informal and formal financial institutions have been created on a case-by-
case basis in 2015, while a formal framework still needs to be developed.
As part of the Digital Financial Inclusion Project, which was inaugurated in
October 2015, low-income adults will be encouraged to open bank
accounts to receive payments from the government, which will also provide
a savings platform for the recipients.
Table 13: Status of the Savings KPI as at December 201522
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Ownership: % of
adult population
having a savings
product with a
formal financial
institution
Usage: % of adult
population saving
with a formal
financial institution
# of savings-
related accounts
with a Deposit
Money Bank or
Microfinance
Bank 24%
71.31m
savings-
related
accounts
76.89m
savings-
related
accounts
42%
(40.4m
adults)
60%
(66.3m
adults)
Source for Actuals: Central Bank of Nigeria
The target for savings in 2015 is for 42 per cent of the Nigerian adult
population to have access to and save through a savings product at a
formal financial institution (see Table 13).
Based on the proxy indicator23, the number of savings-related accounts held
at commercial and microfinance banks stood at 76.9 million as at December
2015, which was an increase compared with 71.3 million accounts recorded
in 2014. Relative to the adult population, the estimated number of savings-
related accounts per 100 adults increased from 76.2 in December 2014 to
80.0 in December 2015. Figure 4 shows that while the number of savings-
21 “No frills” savings accounts are accounts which come without any required minimum balance requirement
and opening charges, such as the Tier 1 KYC Level bank or mobile money account. 22 Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary. 23 Measurement of the progress made based on the desired indicator is being constrained by the issue of a
lack of unique identification of customers across financial institutions and because of lack of additional data
as described in section 3.1.1.
Page 40
related accounts at commercial banks grew from 61.9 to 65.6 million from
2014 to 2015, representing an increase of 5.9 per cent, the number of savings-
related accounts at microfinance banks increased from 9.4 to 11.3 million,
representing an increase of 20.1 per cent.24 In spite of the stronger increase
of savings-related accounts at microfinance banks, with 85.3 per cent,
commercial banks still accounted for the large majority of all savings-related
accounts.
Figure 4: Number of Savings-related Accounts by Type of Financial Institution, 2014
and 2015, in Thousands
Source: Central Bank of Nigeria
The prospects of achieving the savings target will depend to a large extent
on the implementation of a national savings mobilization programme, the
three-tiered KYC requirements, concerted implementation of the Digital
Financial Inclusion Project, and the development of a formal framework on
linkages between informal and formal financial institutions. Also, the uptake
of mobile money accounts and agent banking need to be enforced by
regulators and services providers.
3.1.3. Credit
Credit is important because it can induce investment, increase productivity
and support economic growth of a country. At an individual level, access to
credit can allow someone to make investments which he or she would not
have been able to make and which either may raise productivity or the
standard of living of an individual. While informal lending is an option to
several Nigerians, formal credit is regulated, confers credibility, can entail
more suitable, specialised credit products and may be cheaper than
informal loans.
Key initiatives to drive the credit KPI, as defined in the National Financial
Inclusion Strategy, include the implementation of the Micro, Small and
24 It shall be noted that the data as at 2014 was based on returns from 81 per cent of microfinance banks as
against 67 per cent of all microfinance banks for December 2015. This suggests that the real increase in the
number of savings-related accounts at microfinance banks might even be higher.
61,873 65,548
9,440 11,340
2014 2015
Microfinance Banks
Commercial Banks
Page 41
Medium Enterprises Development Fund (MSMEDF), the development of a
collateral registry for movable assets, the promotion of linkages between
MFBs and DMBs to obtain wholesale funding for on-lending, and the
implementation of entrepreneurship training.
The MSMEDF was launched in August 2013 with a share capital of N220 billion
in order to enhance access to finance for micro, small and medium
enterprises, increase employment and engender inclusive growth. Funds are
released to participating financial institutions at two per cent for on-lending
to MSMEs at a maximum interest rate of nine per cent per annum.
Similarly, the collateral registry for movable assets aims at improving access
to secured finance by allowing lenders to determine any prior security
interests, while linkages between deposit money and microfinance banks are
important to channel funds from deposit money banks through microfinance
banks to the lower income and financially excluded population.
In 2015, disbursement of the MSMEDF gained traction. Over N54 billion was
disbursed for 325 different projects through 124 participating financial
institutions. The collateral cover was reduced from 50 to 30 per cent in order
to further incentivize participating financial institutions to access the Fund.
The web-based National Collateral Registry was developed in 2015 and the
first User Acceptance Test conducted successfully. On-lending took place on
a case-by-case basis between commercial and microfinance banks, but a
formal framework for the linkages had not yet been developed. The
Entrepreneurship Development Centres of the CBN trained 11,896
participants during 2015, exceeding the set target of 11,400. Operations
commenced in the South West and North East geopolitical zones during the
year.
In addition to key initiatives stated in the NFIS, the Anchor Borrowers’
Programme (ABP) of the Central Bank of Nigeria was launched in Kebbi State
in November 2015 in order to lift thousands of small farmers out of poverty
and generate millions of jobs for unemployed Nigerians.25 Under the
Programme, smallholder farmers form cooperatives and sell produce to
anchor firms at a predetermined price. Banks provide loans to the
participating farmers at a maximum interest rate of nine per cent per annum
through the MSMEDF, while the Nigerian Agricultural Insurance Corporation
provides insurance cover.
25 See https://www.cbn.gov.ng/FeaturedArticles/2015/articles/PresBuhariLaunchABP.asp for more
information. Accessed in June 2016.
Page 42
Table 14: Status of the Credit KPI as at December 201526
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Credit: % of adult
population using a
credit product with
a formal financial
institution
# of credit
accounts with a
Deposit Money
Bank or
Microfinance
Bank
2%
6.86m
credit
accounts
7.25m
credit
accounts
26%
(25.0m
adults)
40%
(44.2m
adults)
Source for Actuals: Central Bank of Nigeria
The National Financial Inclusion Strategy defined a target of 26 per cent of
adults using a credit product with a formal financial institution by 2015. As
Table 14 shows, the number of outstanding credit accounts at commercial
and microfinance banks as at December 2015 was 7.2 million, indicating an
increase of about 380,000 accounts or 5.6 per cent compared to December
2014. In terms of credit accounts per 100 adults, the number increased from
7.3 to 7.5, accounting for a rise of 2.7 per cent.
Figure 5: Number of Credit Accounts by Type of Financial Institution, 2014 and 2015,
in Thousands
Source: Central Bank of Nigeria
Figure 5 indicates the number of credit accounts by type of financial
institution. While the number of credit accounts at microfinance banks
increased by about 10.9 per cent, the number of credit accounts at
commercial banks fell marginally by one per cent. Therefore, the share of
credit accounts at microfinance banks out of credit accounts at both,
microfinance and commercial banks, increased slightly from 55.4 to 58.2 per
cent, which shows that microfinance banks play a crucial role in driving the
credit target.27
26
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary. 27 Please note that the data provided on credit accounts at microfinance banks as at 2015 is only based on
returns of 67 per cent of microfinance banks, while the 2014 data is based on returns of 81 per cent of
microfinance banks. This means that the true increase is likely to be even greater.
3,059 3,029
3,803 4,218
2014 2015
Microfinance Banks
Commercial Banks
Page 43
While the increase in the number of credit accounts is laudable, the status of
the credit indicator is not on track, because even if each of the 7.2 million
outstanding credit accounts was owned by a unique adult, the value of the
desired indicator as at December 2015 would only have been 7.5 per cent,
which is significantly lower than the 26 per cent target 2015.28
There is therefore need for more efforts to support the achievement of the
credit target. In particular, awareness about the National Collateral Registry
needs to be created so that the registry brings about the desired benefits.
Also, the recently launched Anchor Borrowers’ Programme should be rolled
out in all States of Nigeria based on lessons learned from the pilot in Kebbi
State and on-lending from commercial to microfinance banks and institutions
should be considered.
3.1.4. Insurance
Insurance reduces or completely eliminates risk of a financial loss incurred for
instance by an accident, a health challenge or adverse weather shocks such
as drought. Individuals may benefit from insurance in the form of mitigating
risks, being able to better plan ahead due to less uncertainty, and by using
available resources more efficiently as less money needs to be set aside for
unforeseeable future events. At the national level, higher insurance
penetration may lead to greater efficiency, higher productivity, and
improved well-being of citizens.
Crucial initiatives to advance on the insurance KPI according to the National
Financial Inclusion Strategy include the regulatory enforcement of
compulsory insurance products, the usage of agents as distribution channels
for insurance products and the diversification of insurance products to serve
low-income clients.
In 2015, several insurance companies partnered with mobile network
operators to sell insurance policies through mobile phones. Also, the
Bancassurance Guidelines, which define modalities for insurance companies
to use banks as a sales channel, are in the process of being developed. The
National Insurance Commission published Guidelines on Takaful and
Microinsurance in 2013. While Takaful insurance targets the Islamic
population of Nigeria, microinsurance products aim at providing insurance
cover to the low-income population. In 2015, NAICOM approved window
licenses to 17 insurance companies to start microinsurance operations.
Additionally, a microinsurance scheme was launched in collaboration with
the Delta State Government and is being implemented on an ongoing basis.
28 Please note that credit accounts at primary mortgage banks were not included. However, it is unlikely that
including this data would raise the value from 7.5% to a value close to 26%.
Page 44
Table 15: Status of the Insurance KPI as at December 201529
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Insurance: % of
adult population
being covered by an
insurance policy with
a formal institution
# of insurance
policies registered
by the National
Insurance
Commission
(NAICOM)
1% 1%
-
(Data in-
complete)
21%
(20.2m
adults)
40%
(44.2m
adults)
Source for Actual 2014: EFInA (2014)
The target in the National Financial Inclusion Strategy for 2015 states that 21
per cent of the adult population should be covered by an insurance policy
(see Table 15). In the reporting year, 69 per cent of the insurance companies
operating in life insurance business and 59 per cent of the insurance
companies operating in non-life insurance business did not provide data,
which hampered the realistic assessment of the performance level achieved.
However, given that insurance penetration stood at about one per cent only
in 2014 (EFInA, 2014), it is likely that also as at 2015, the target of 21 per cent
had not been achieved.
Going forward, insurance companies will need to provide complete and
reliable data so that progress made on this indicator can be measured.
Additionally, insurance companies should enhance sales of microinsurance
policies. Partnerships with telecommunication companies need to be further
intensified, given the potential of mobile phones to reach the rural
population. At the same time it is important that data on microinsurance
policies sold through mobile phones are included in NAICOM’s reporting
framework. Compliance with compulsory insurance products should be
further enforced and the Bancassurance Guidelines need to be finalized so
that more access points are available in the country to attract and better
serve potential insurance clients.
3.1.5. Pensions
Pensions allow individuals to save for old age in a structured way. Pension
contributors benefit by lowering uncertainty about income at old age and
providing additional income in the form of interest earnings accumulated
over the work life time. For the economy as a whole, pensions contribute to
investment, increased productivity and economic growth as the
accumulated pension funds are invested by pension fund administrators
(PFA) within the country.
The National Financial Inclusion Strategy defined key initiatives to boost
uptake of regulated pensions, including the compulsory inclusion of all States
in the Contributory Pension Scheme (CPS), the implementation of the Pension
29
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
Page 45
Reform Act as well as the amendment of regulations to allow for the inclusion
of smaller firms, cooperatives and associations in the current pension
scheme.
As at the end of the third quarter of 2015, 26 State Governments had
enacted their Pension Reform Laws while 10 State Governments were at the
Bill stage. To implement the Pension Reform Act 2014, PenCom drafted
necessary extant legislations. Approval of the draft legislations was still
outstanding as at December 2015. The Pension Reform Act 2014 lowered the
number of employees required for an organization to participate
mandatorily in the Contributory Pension Scheme from five to three.
Additionally, organizations with less than three employees and self-employed
persons are entitled to participate in the CPS. Therefore, PenCom conducted
a survey on how the latter segments could participate in the CPS and was
finalizing Guidelines on the Micro Pension Plan as at December 2015. The
Commission also established a department dedicated to micropensions in
2015.
The 2015 target of the National Financial Inclusion Strategy for the pensions
KPI was that 22 per cent of the adult population should be registered with a
regulated pension scheme. As at December 2015, the proportion of Nigerian
adults being registered with a pension scheme regulated by the National
Pension Commission (PenCom) was 7.6 per cent, implying a marginal
increase over December 2014 (7.0 per cent).
Table 16: Status of the Pension KPI as at December 201530
Definition of Indicator Baseline
2010 Actual 2014
Actual
2015 Target 2015 Status Target 2020
Pensions: % of adult
population that is registered
with a regulated pension
scheme
5%
7.0%
(6.6m
adults)
7.6%
(7.3m
adults)
22%
(21.2m
adults)
40%
(44.2m
adults)
Source for Actuals: Returns from the National Pension Commission
In absolute terms, the number of adults enrolled in a pension scheme
regulated by the PenCom increased by approximately 770,000 from 6.6
million to 7.3 million from December 2014 to December 2015. Compared to
the 22 per cent target, the achievement was far behind schedule as the gap
to cover for 2015 amounted to approximately 14 million adults (see Table 16
and Figure 6).
30
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
Page 46
Figure 6: Percentage of Adult Nigerians registered with a regulated Pension Scheme,
Comparison of Actuals of 2010, 2014 and 2015 with Target 2015
Source: Returns from the National Pension Commission
Out of the total 7.3 million adults registered with a pension scheme by
PenCom as at December 2015, 6.95 million adults were contributing, while
the remaining approximately 400,000 adults were making use of their
pension. Out of all contributors, 99 per cent (6.89m adults) were contributing
through a Retirement Savings Account (RSA). Out of these contributors, 71
per cent (4.91m) were male and 29 per cent (1.98m) were female (see Figure
7).
Figure 7: Distribution of RSA Contributors by Gender, December 2015
Source: Returns from the National Pension Commission
The majority of the RSA contributors was between 30 and 49 years old, about
2.7 million (39 per cent) being located in the 30-39 age bracket and 1.9
million (27 per cent) in the 40-49 age bracket. Only slightly more than 100,000
contributors were older than 65 years (see Figure 8).
5.0% 7.0% 7.6%
22.0%
2010 2014 2015 Target2015
71%
29% Male
Female
Page 47
Figure 8: Breakdown of RSA Contributors by Age, December 2015
Source: Returns from the National Pension Commission
In order to close the existing gap, it is crucial that the micro pension plan,
which aims at providing formal pensions to informal sector workers and the
self-employed, is implemented successfully and compliance with the Pension
Reform Act 2014 further enforced in all States of the Federation.
3.1.6. Capital Market Products
The Securities and Exchange Commission of Nigeria developed a Capital
Market Master Plan for the period of 2015 to 2025.31 In addition to the Capital
Market Master Plan, the development of a Financial Inclusion Strategy for the
Nigerian Capital Market progressed in 2015.
3.2. Channels
The National Financial Inclusion Strategy defined key performance indicators
for five different channels through which financial services can be accessed,
namely for commercial bank branches, microfinance bank branches,
Automated Teller Machines (ATMs), Point-of-Sale (PoS) devices, and agents.
The availability of more financial channels will reduce the physical distance
and high transportation costs for users to access financial services, and
thereby reduce two key barriers to financial inclusion. This section gives an
overview of the progress made on defined targets of channel KPIs as at
December 2015.
3.2.1. Commercial Bank Branches
Commercial bank branches are not only crucial for serving customers, but
also for serving other financial channels such as agents or ATMs.
31 Available at: www.sec.gov.ng/files/Masterplan_web.pdf. Accessed in June 2016.
725,984
2,694,849
1,862,589
1,203,742
294,636 103,596
<30 30-39 40-49 50-59 60-65 >65
Page 48
One of the key initiatives to drive the deployment of commercial bank
branches as defined in the National Financial Inclusion Strategy is the
development of guidelines for operating mini-branches. The guidelines have
not been developed as at 2015 as emphasis has been placed on branchless
channels, such as bank agents and mobile money services.
Table 17: Status of the Commercial Bank Branches KPI as at December 201532
Definition of Indicator Baseline 2010 Actual 2014 Actual 2015 Target 2015 Status Target
2020
Commercial Bank
Branches per 100,000
adults
6.8
5.9
(5,508
branches)
5.7
(5,462
branches)
7.5
(7,213
branches)
7.6
(8,398
branches)
Source for Actuals: Central Bank of Nigeria
The National Financial Inclusion Strategy set a target of 7.5 commercial bank
branches per 100,000 adults by 2015. This target amounts to about 7,213
branches. As at end December 2015, there were 5,462 branches of
commercial bank branches in Nigeria. Relative to the population, this was 5.7
commercial bank branches per 100,000 adults. Compared to 5,508 branches
or 5.9 branches per 100,000 adults in December 2014, this shows a decrease
of 46 branches (0.8 per cent) or 0.2 branches per 100,000 adults, which
implies an extension of the declining trend since 2010. Relative to the 2015
target of 7.5 commercial bank branches per 100,000 adults, there was a
shortfall of approximately 1,751 branches (Table 17 and Figure 9).
Figure 9: Number of Commercial Bank Branches, Comparison of Actuals of 2010,
2014 and 2015 with Target 2015
Source: Central Bank of Nigeria
An analysis of the number of commercial bank (CB) branches by geopolitical
zone shows that branches are more frequently located in zones with
relatively high financial inclusion rates.
While there were about 10.8 CB branches per 100,000 adults in the South
West, there were only 2.9 and 2.1 CB branches per 100,000 adults in the North
West and North East, respectively (see Figure 10). In absolute terms, while
there were 2,227 branches (40.4 per cent of all branches) located in the
32
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
6.8 5.9 5.7 7.5
2010 2014 2015 Target2015
Page 49
South West, only 243 branches (4.4 per cent) were situated in the North East.
Examining only operational CB branches, the relative gap between the
South West and North East was even larger as a higher-than-average
percentage of CB branches in the North East (22.6 per cent) was found to be
non-operational (see Table 18). A total of 1,503 branches (27.3 per cent of
the total) were situated in Lagos State, which had an estimated share of the
total Nigerian adult population of merely 7.5 per cent in 2014 (EFInA, 2014).
Also, 239 Local Government Areas (LGAs), 32.5 per cent, of 735 LGAs that
were captured in the geospatial mapping were found to have no single
commercial bank branch.
Despite the high cost of branches and emphasis on “branchless banking”,
bank branches remain crucial not only in serving consumers, but also in
serving other channels such as bank agents or ATMs. There is thus an
increasing need to find innovative ways to cut costs involved in deploying
and maintaining branches and in increasing consumer demand. Also, given
the vast difference of CB branches relative to adult population between
different geopolitical zones, financial services providers need to place more
emphasis on dispersion and consider opening branches in areas where there
are currently no branches and a large financially excluded population,
rather than concentrating branches in urban centres.
Figure 10: Financial Inclusion Rate in 2014 and # of Selected Financial Access Points
/ 100,000 Adults in 2015, by Geopolitical Zone
0.5
0.8
2.2
2.4
2.8
2.9
2.1
2.9
5.9
6.0
5.6
10.8
5.5
7.0
15.8
16.0
12.5
27.8
North East
North West
South South
North Central
South East
South West
31.6
44.0
67.3
67.3
74.6
75.2
North East
North West
South South
North Central
South East
South West
Financial Inclusion Rate 2014
(EFInA, 2014)
# of Financial Access Points / 100,000
Adults 2015 (CBN, 2015)
# of ATMs /
100,000 adults
# of CB Branches /
100,000 adults
# of MFB Branches /
100,000 adults
Page 50
Table 18: Number of Operational and Non-Operational Access Points, by
Geopolitical Zone (CBN, 2015)33
Geopol-
itical
Zone
# of Commercial Bank Branches # of Microfinance Bank Branches # of Automated Teller Machines
(ATMs)
Operat-
ional
Non-
Operational Total
Operat-
ional
Non-
Operational Total
Operat
-ional
Non-
Operational Total
South
West
2,072
(93.0%)34
155
(7.0%)
2,227
(100.0%)
548
(90.3%)
59
(9.7%)
607
(100.0%)
5,452
(95.3%)
268
(4.7%)
5,720
(40.7%)
South
South
823
(91.0%)
81
(9.0%)
904
(100.0%)
303
(89.6%)
35
(10.4%)
338
(100.0%)
2,354
(97.2%)
67
(2.8%)
2,421
(11.2%)
North
Central
763
(91.4%)
72
(8.6%)
835
(100.0%)
292
(85.9%)
48
(14.1%)
340
(100.0%)
2,136
(95.7%)
97
(4.3%)
2,233
(15.9%)
South
East
614
(87.3%)
89
(12.7%)
703
(100.0%)
306
(85.2 %)
53
(14.8%)
359
(100.0%)
1,473
(93.6%)
100
(6.4%)
1,573
(17.2%)
North
West
529
(89.1%)
65
(10.9%)
594
(100.0%)
146
(89.6%)
17
(10.4%)
163
(100.0%)
1,407
(96.2%)
55
(3.8%)
1,462
(10.4%)
North
East
188
(77.4%)
55
(22.6%)
243
(100.0%)
45
(83.3%)
9
(16.7%)
54
(100.0%)
567
(88.7%)
72
(11.3%)
639
(4.5%)
Nigeria 4,989
(90.6%)
517
(9.4%)
5,506
(100.0%)
1,640
(88.1%)
221
(11.9%)
1,861
(100.0%)
13,389
(95.3%)
659
(4.7%)
14,048
(100.0%)
3.2.2. Microfinance Branches
Microfinance bank branches are essential for serving “the economically
active low-income earners, the un-banked, and under-served people, in
particular, vulnerable groups such as women, physically challenged, youths,
micro-entrepreneurs, informal sector operators, subsistence farmers in urban
and rural areas” (Central Bank of Nigeria, 2012b, p.7).
Initiatives defined in the National Financial Inclusion Strategy to promote the
number of microfinance branches in the country include the implementation
of the revised microfinance policy, the creation of incentives for rural branch
expansion and investor fora to encourage microfinance bank expansion.
During the year, the implementation of the revised microfinance policy
continued and sensitization campaigns were conducted to ensure its
effectiveness. The CBN in collaboration with the International Fund for
Agricultural Development (IFAD), under the Rural Finance Institution Building
Programme (RUFIN), conducted several capacity building workshops on rural
business plans for MFBs to enable them expand their outreach to rural areas.
As at December 2015, some beneficiaries had already commenced the
implementation of its rural business plans. RUFIN/IFAD also sponsored a train-
33 Please note that the values are based on the second round of the Geospatial Mapping Survey of financial
access points which was conducted from November 2014 to April 2015. Therefore, the total values for Nigeria
differ from the values shown in other sections of the report. Also, 39 of the 774 LGAs in the country were not
captured, mainly because of security issues in the North East of the country.
34 Percentages in parentheses refer to the share of operational and non-operational access points out of the
total number of the particular type of access point which were captured in the respective geopolitical zone.
Page 51
the-trainer program to develop a crop of training service providers to train
and develop a critical mass of expertise in the industry.
Also, in the year, the CBN held investor fora in collaboration with
development partners to encourage State Governments on the need to
establish MFBs within their States, given the uneven distribution of MFBs in
Nigeria. As at December 2015, Katsina, Kano and Niger States had keyed
into the policy of devoting one per cent of their annual budget to the
establishment of MFBs.
Table 19: Status of the Microfinance Bank Branches KPI as at December 201535
Definition of Indicator Baseline
2010 Actual 2014 Actual 2015 Target 2015 Status
Target
2020
Microfinance Bank
Branches per 100,000
adults
2.9
2.3
(2,107
branches)
2.3
(2,227
branches)
4.5
(4,328
branches)
5.0
(5,525
branches)
Source for Actuals: Central Bank of Nigeria
The defined 2015 target for the Microfinance Bank KPI in the National
Financial Inclusion Strategy is 4.5 MFB branches per 100,000 adults. As at
December 2015, there were 2,227 microfinance bank branches,
approximately equal to 2.3 branches per 100,000 adults (see Table 19).
Compared with December 2014, this accounted for a marginal increase of
120 branches (5.7 per cent). While the increase reverted the declining trend
between 2010 and 2014, the number of MFB branches achieved was below
the 2015 target of approximately 4,328 branches or 4.5 branches per 100,000
adults. The gap of 2,101 branches implied that almost twice as many
branches as available in December 2015 would have been required to
achieve the target (see Figure 11).
Figure 11: Number of Microfinance Bank Branches, Comparison of Actuals of 2010,
2014 and 2015 with Target 2015
Source: Central Bank of Nigeria
In terms of dispersion of MFB branches by geopolitical zone, the analysis is
similar to the analysis of commercial bank branches. While the number of
MFB branches per 100,000 adults was 2.9 in the South West, there were only
0.8 and 0.5 MFB branches per 100,000 adults in the North West and North
35
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
2.9 2.3 2.3
4.5
2010 2014 2015 Target2015
Page 52
East, respectively (see Figure 10). In absolute terms, 607 MFB branches were
located in the South West, while the North East only accounted for 54
branches (see Table 18). Lagos State alone hosted 277 microfinance
branches, which was 14.9 per cent of all branches across the country. Also,
116 of 735 captured LGAs (15.8 per cent) had neither a single commercial
bank nor a microfinance bank branch.
The performance level indicates that more effort needs to be made to
increase the number of MFB branches as the purpose of microfinance banks
is to serve the economically active low-income earners in spatially dispersed
rural areas. In order to better serve the financially excluded population,
microfinance banks are endeavoured to consider linkage arrangements with
commercial banks in the coming years. Also, new branches should primarily
be deployed in areas that currently have no or only few financial access
points, in particular in the North East and North West of the country.
3.2.3. Automated Teller Machines
Automated Teller Machines (ATMs) are important to enable clients make
withdrawals, make inquiries on account balance, take deposits and make
payments.
The deployment of multifunctional ATMs, the revision of the off-site ATM policy
and the establishment of low-cost ATMs in rural areas were initiatives listed in
the National Financial Inclusion Strategy to increase the number of ATMs in
Nigeria.
In 2015, several banks deployed multifunctional ATMs and the second round
of the Geospatial Mapping Survey of financial access points in Nigeria was
concluded. The results provide insights into suitable rural areas which
financial services providers may target for the deployment of ATMs and other
financial access points.36
Table 20: Status of the ATM KPI as at December 201537
Definition of Indicator Baseline
2010
Actual
2014
Actual
2015 Target 2015 Status Target 2020
ATMs per 100,000
adults 11.8
17.0
(15,935
ATMs)
17.1
(16,452
ATMs)
42.8
(41,160
ATMs)
59.6
(65,859
ATMs)
Source for Actuals: Central Bank of Nigeria
As the target for 2015, 42.8 ATMs per 100,000 adults were to be deployed by
2015, which accounted for approximately 41,160 ATMs. The number of
actually deployed ATMs increased by 517 or 3.2 per cent between
December 2014 and 2015, amounting to 16,452 at the end of the year (see
36 Interactive online maps are available at: www.fspmaps.com. Accessed in June 2016. 37
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
Page 53
Table 20). This was not enough to achieve the 2015 target (Figure 12) as the
gap to cover for 2015 amounted to almost 25,000 additional ATMs.
Figure 12 – Number of ATMs, Comparison of Actuals of 2010, 2014 and 2015 with
Target 2015
Source: Central Bank of Nigeria
On geopolitical zone basis, there were 27.8 ATMs per 100,000 adults
deployed in the South West, while the corresponding value was only 7.0 in
the North West and 5.5 in the North East (see Figure 10). In absolute terms,
5,720 ATMs were deployed in the South West, about four times as many as in
North West (1,462) and about nine times as many as in North East (639) (see
Table 18).
In order to keep focus on the existing 2020 target of about 66,000 ATM,
financial services providers need to expand their ATM network substantially,
particularly in remote areas, and leverage on Local Governments to ensure
security.
3.2.4. Point-of-Sale Devices
Point-of-Sale (PoS) devices enable merchants to process electronic customer
payments at the purchase location. PoS devices include different types of
PoS terminals which allow customers to pay by inserting or swiping their debit
or credit card as well as other devices, such as mobile phones and tablets.
PoS devices are important because they allow individuals to make payments
electronically, which can be safer and more convenient as individuals do not
need to carry large amounts of cash. For the economy as a whole,
electronic payments can contribute to economic growth by reducing
corruption, increasing efficiency and making monetary policy more
effective.
The key initiative to drive the adoption of PoS devices is the Cash-less Nigeria
Project. The policy stipulates a cash handling charge on daily cash
withdrawals of more than N500,000 for individuals and N3,000,000 for
corporate bodies. As at 2015, the policy was rolled out in six States and the
Federal Capital Territory, while awareness campaigns about the policy were
held in nine additional States during the year.
11.8 17.0 17.1
42.8
2010 2014 2015 Target 2015
Page 54
Table 21: Status of the PoS KPI as at December 201538
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
# of PoS Devices
per 100,000 adults
PoS Terminals per
100,000 adults 13.3
88.3
(82,549
PoS)
121.5
(116,868
PoS)
442.6
(425,638
PoS)
850.0
(939,267
PoS)
Source for Actuals: Central Bank of Nigeria
The 2015 target for the PoS KPI was 442.6 PoS devices per 100,000 adults. The
number of PoS devices actually deployed as at December 2015 stood at
approximately 117,000, representing an increase of about 34,000 POS
devices or 42 per cent from 2014 (see Table 21). The number of PoS devices
per 100,000 adults increased by 38 per cent from 88.3 to 121.5 between 2014
and 2015. Relative to the baseline year, the 2015 value was more than nine
times the 2010 value. However, compared with the 2015 target, the gap to
cover for 2015 was 264 per cent or approximately 309,000 PoS devices,
implying that the actual number of PoS devices would need to be about 3.6
times as high as it actually was to achieve the 2015 target (Figure 13).
However, the status of the PoS KPI is unclear as the data reported as at
December 2015 is only based on the number of PoS terminals and does not
include other PoS devices, such as mobile phones or tablets.
Figure 13: Number of PoS Devices, Comparison of Actuals of 2010, 2014 and 2015
with Target 2015
Source: Central Bank of Nigeria
In order to achieve the 2020 target, the Cash-less Nigeria Project will need to
be rolled out across the States of the Federation and incentives for
deployment of PoS devices increased.
3.2.5. Agents
Agents play a key role in the delivery of financial services to the financially
excluded population, because they are less expensive than the
establishment of bank branches or ATMs. Agents are third parties that
perform financial services to customers on behalf of a licensed financial
institution or mobile money operator in the agents’ own premises. An agent
38
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
13.3 88.3 121.5
442.6
2010 2014 2015 Target 2015
Page 55
may provide conventional financial services or mobile money services. The
latter have large potential to drive financial inclusion as even about 38 per
cent of the financially excluded adult population of Nigeria own a mobile
phone (EFInA, 2014).
The National Financial Inclusion Strategy defined the implementation of
agent banking regulations as the key initiative to drive the adoption and
usage of agent banking in Nigeria.
While the Guidelines for the Regulation of Agent Banking and Agent Banking
Relationships in Nigeria were approved in 2013, the Regulatory Framework for
Licensing Super-Agents in Nigeria was approved in 2015. The Framework
defines the requirements and responsibilities of super-agents.39 According to
the Framework, a super-agent needs to sub-contract at least 50 other
agents.40
Additionally, the Central Bank of Nigeria released the Guidelines on Mobile
Money Services in Nigeria in 2015 to ensure structured and orderly
development as well as safety and effectiveness of mobile money services,
and thereby enhance user confidence in Nigeria.41 Furthermore, an agent
database was developed which is to be deployed in 2016 and sensitization
campaigns on agent banking were conducted in the six geopolitical zones
of Nigeria.
Table 22: Status of the Agents KPI as at December 201542
Definition of Indicator Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Agents per 100,00 adults
0.0
-
(Data in-
complete)
-
(Data in-
complete)
31.0
(29,812
agents)
62.0
(68,511
agents)
The NFIS target was 31.0 agents per 100,000 adults to be deployed by 2015
(see Table 22). As at December 2015, there were 688 bank agents registered
by financial institutions. A realistic assessment of the achievement of the
target could not be made as agents were not uniquely identifiable and as
such, the same agent could be reported by more than one financial services
provider. Additionally, data on mobile money agents provided by mobile
money operators was not complete as at December 2015.
39
A super-agent is an agent who is sub-contracting other agents.
40 The Framework can be accessed here:
https://www.cbn.gov.ng/out/2015/bpsd/regulatory%20framework%20for%20licensing%20super-
agents%20in%20nigeria.pdf. Accessed in June 2016.
41 The Guidelines can be accessed here:
https://www.cbn.gov.ng/out/2015/bpsd/guidelines%20on%20mobile%20money%20services%20in%20nigeria.
pdf. Accessed in June 2016. 42
Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary.
Page 56
However, the second round of the Geospatial Mapping Survey captured
8,257 mobile money agent locations as at April 2015. Out of this, only 3,567
(43 per cent) were found to actually carry out mobile money activities,
implying that a large proportion of mobile money agents that were
registered did not actually pursue mobile money engagements (Central
Bank of Nigeria, 2015). The Geospatial Mapping Survey results indicated that
the target of 31.0 agents per 100,000 adults, or about 29,812 agents in
absolute terms, would not have been reached.43
It is fundamental that agent banking and mobile money services are
expanded, given their potential to reach the financially excluded
population, especially in rural areas, and their lower cost compared to
“brick-and-mortar” branches. The Super-Agent Framework will play a key role
in supporting this expansion. The deployment of the agent database will help
to overcome the issue of lack of unique identification of agents and help
better track the achievement of the defined targets in future.
3.3. Enablers
Financial inclusion enablers promote financial inclusion by removing or
lowering existing barriers. The National Financial Inclusion Strategy defined
five enablers to drive the implementation process, namely Know Your
Customer (KYC) ID, financial literacy, consumer protection, women initiatives,
and children & youth initiatives. This section describes progress made on
these five enablers.
3.3.1. Know Your Customer (KYC) ID
KYC requirements define which identification documents financial services
providers need to request from customers and aim to prevent criminal
activities of customers, in particular, money laundering and the financing of
terrorism.
While on the one hand, it is important for financial institutions to be able to
verify the identification of their customers, on the other hand it is essential
that individuals are able to identify themselves so that they are not restricted
from accessing formal financial services. To this end, the Central Bank of
Nigeria released simplified three-tiered KYC requirements in 2013. The
requirements state that accounts of all three tiers can be opened without
any minimum amount. Additionally, for a Tier 1 account, a passport
photograph, a telephone number and personal information, such as the
name, address and place and date of birth, are sufficient KYC requirements.
43
It shall be noted that the Survey was concluded by April 2015 and therefore the actual number of mobile
money agents as at December 2015 was likely higher.
Page 57
This makes it easier for the low-income population to open and use bank or
mobile money accounts.
The National Identity Management Commission (NIMC) commenced the
introduction of the National Identification Number (NIN). The objective of the
NIN is to provide a unique number to all Nigerians which can be used to
verify an individual’s identity, for instance when an individual wants to access
financial services. In 2015, NIMC initiated a harmonization of the ID
management of several institutions, such as the CBN, the Nigerian
Communications Commission, or the Independent National Electoral
Commission (INEC), in order to link the NIN to the identity numbers of other
agencies.
In order to track how many adult Nigerians meet the minimum requirements
to open a bank account, a key performance indicator was defined in the
National Financial Inclusion Strategy on the KYC ID. This indicator tries to
measure progress made on reducing the barrier of high documentation
requirements hindering access to financial services.44
Table 23: Status of the KYC ID KPIs as at December 201545
Definition of Desired
Indicator
Definition of Proxy
Indicator
Baseline
2010
Actual
2014
Actual
2015
Target
2015 Status
Target
2020
Know Your Customer
(KYC) Tier 1 ID:
% of adult population
having a KYC Tier 1 ID
% of adult
population
having a mobile
phone
18%
62.8%
(58.7m
adults)
-
(Data in-
complete)
59%
(56.7m
adults)
46 100%
(110.5m
adults)
National Identification Number (NIN):
% of adult population having a National
Identification Number (NIN) 0%
5.3%
(5.0m
adults)
7.5%
(7.2m
adults)
59%
(56.7m
adults)
100%
(110.5m
adults)
Source for Actuals: EFInA (2014); Returns from the National Identity Management
Commission
The KYC ID target for 2015 states that 59 per cent of adult Nigerians should
have a KYC ID. As the percentage of adult Nigerians owning a mobile phone
at the time of writing is collected from the demand side only and EFInA’s
Access to Financial Services in Nigeria Survey is conducted biennially, no
data is available on the KYC Tier 1 ID indicator for 2015. However, as at 2014,
about 62.8 per cent of adult Nigerians owned a mobile phone. Using this 44 The National Financial Inclusion Strategy document defined a unique National Identity, issued by the
National Identity Management Commission (NIMC), as the actual KYD ID. However, given that the
harmonization exercise of several IDs, such as the BVN or the voter’s card, with the National Identification
Number (NIN) is still ongoing at the time of writing, another KYC ID indicator in addition to the National
Identification Number has been defined. This KPI tracks the percentage of adult Nigerians owning a mobile
phone as this adult population segment is regarded as being able to open a Tier 1 bank account. This is
because for a KYC Tier 1 bank account, having a telephone number is the only identification requirement
apart from personal details, such as someone’s name, address and date and place of birth, and a passport
photograph. Ownership of a mobile phone is used as a proxy for having a telephone number. 45 Notes on the table are available underneath Table 2 (Dashboard on Implementation Progress towards
Targets) in the Executive Summary. 46
Status green based on the assumption that the percentage of adults owning a mobile phone did not
decrease from 2014 to 2015.
Page 58
value for an assessment against the 2015 target of 59 per cent, the status is
perceived as on track (see Table 23).
The number of adults having a National Identification Number increased
from 5.0 million in December 2014 to 7.2 million in December 2015 (see Table
23). The percentage of adults having a NIN grew from 5.3 to 7.5 per cent
during the same time period. Although the trend was positive, the target of
59 per cent having a NIN by 2015 was not achieved (see Figure 14).
Figure 14: Percentage of adult Nigerians having a National Identification Number,
Comparison of Actuals of 2010, 2014 and 2015 with Target 2015
Source: Returns from the National Identity Management Commission
Figure 15 shows that out of the 7,228,927 adult NIN holders as at December
2015, 59 per cent (4,270,595) were male, while 41 per cent (2,958,231) were
female.
Figure 15: Distribution of adult Nigerians with a National Identification Number (NIN)
by Gender, December 2015
Source: Returns from the National Identity Management Commission
Figure 16 highlights the distribution of NIN holders by age. While about 5.5
million, or 76 per cent of all adult NIN holders, were younger than or equal to
45 years old, only about 0.7 million or 10 per cent were older than 55. With
about 2.1 million, or 29 per cent of all adult NIN holders, the age bracket 26-
33 was the largest.
0.0% 5.3% 7.5%
59.0%
2010 2014 2015 Target2015
59%
41% Male
Female
Page 59
Figure 16: Distribution of adult Nigerians with a National Identification Number (NIN)
by Age, December 2015
Source: Returns from the National Identity Management Commission
Going forward, enrolment of the NIN needs to be expanded significantly to
ensure that all adult Nigerians have a NIN by 2020.
3.3.2. Financial Literacy
Financial literacy is an enabler of financial inclusion as it tries to reduce the
key barrier of lack of understanding of financial products and its benefits.
Key initiatives as defined in the National Financial Inclusion Strategy to
increase the financial literacy level of the Nigerian population include the
implementation of a financial literacy framework, collaboration between the
CBN and Federal and State Ministries of Education to implement financial
literacy curricula in schools, and collaboration between CBN and financial
services providers to implement financial literacy campaigns.
The Central Bank of Nigeria released the National Financial Literacy
Framework in October 2015.47 The document highlights the objectives of the
strategy, as well as implementation plans and responsibilities of stakeholders.
A full implementation of the key action plan is to commence in 2016. The
Central Bank of Nigeria is also collaborating with the Federal Ministry of
Education in the curriculum development on financial literacy for Nigerian
schools. Equally, the Bank provided financial education in over 10 States
across the Federation in 2015 under its harmonized sensitization campaigns
and collaborated with several development partners, such as Mercy Corps
and GIZ, to implement financial literacy programmes.
Additionally, the Bank, with support from the National Bureau of Statistics,
Enhancing Financial Innovation & Access and Marketworx Africa, conducted
the Nigeria Financial Literacy Baseline Survey and published the report in
2015.48
47 The Framework can be accessed here: https://www.cbn.gov.ng/out/2016/cfpd/financial%20literacy.pdf.
Accessed in June 2016.
48 The report can be accessed at: https://www.cbn.gov.ng/out/2016/cfpd/baseline%20survey.pdf. Accessed
in June 2016.
1,454,143
2,131,064 1,874,839
1,020,581 748,300
18-25 26-33 34-45 46-55 >55
Page 60
The National Financial Inclusion Strategy defined targets on the percentage
of primary and secondary schools as well as tertiary institutions which shall
have implemented a financial literacy curriculum by 2020. In order to
achieve this target, the financial literacy curriculum needs to be finalized and
approved as soon as possible.
Additionally, findings of the Nigeria Financial Literacy Baseline Survey shall be
used by regulators and service providers to draft strategies for their financial
literacy programmes towards the financially excluded.
3.3.3. Consumer Protection
Lack of trust in financial institutions was mentioned as another barrier to
financial inclusion in the National Financial Inclusion Strategy, referring to
EFInA (2010). Consumer protection is a key enabler of financial inclusion,
because it aims at establishing and maintaining trust of the Nigerian
population in the financial sector of the country.
The key initiative to increase the level of consumer protection in the financial
sector in Nigeria is the development and implementation of a Consumer
Protection Framework. As at December 2015, the Framework has been
developed, but not yet approved. Approval and implementation of the
Framework is expected in 2016. Additionally, the Nigeria Deposit Insurance
Corporation extended deposit insurance coverage to subscribers of mobile
money operators to engender confidence in mobile payment services and
promote financial inclusion.49
The National Financial Inclusion Strategy stipulated that the Consumer
Protection Framework should be implemented by 2012. Given the
outstanding approval of the developed Framework, this target was not
reached on time.
For upcoming years, it is crucial that awareness about deposit insurance
coverage for subscribers of mobile money services is ensured. Also, once the
Consumer Protection Framework has been released to the public, it will be
crucial that financial services providers make use of it and other regulators,
which do not have a similar framework in place, follow suit.
3.3.4. Women Initiatives
Another enabler of financial inclusion is specific initiatives for women. The
rationale is that women have been more financially excluded than men in
Nigeria. For instance, as at 2014, the male financial exclusion rate amounted
to 35.8 per cent, compared to a financial exclusion rate of 42.7 per cent for
49 The Framework can be accessed at: http://ndic.gov.ng/wp-
content/uploads/2016/01/FRAMEWORK%20FOR%20THE%20ESTABLISHMENT%20OF%20PASS-
THROUGH%20DEPOSIT%20INSURAN.pdf. Accessed in June 2016.
Page 61
women (EFInA, 2014). Therefore, initiatives which specifically target women
have high potential to positively impact the national financial inclusion rate.
Key initiatives targeted at enhancing financial inclusion of women include
the provision of 60 per cent of the MSMEDF for women, entrepreneurship
development and financial linkage programmes tailored specifically to
women, and encouragement of women who have an appropriate business
to become agents.
In 2015, sensitization campaigns were conducted with the objective of
encouraging women to access 60 per cent of the N220 billion Micro, Small,
and Medium Enterprises Fund. In terms of measuring achievement of the 60
per cent rate, the process of developing a database to capture MSMEDF-
related data by gender was initiated in 2015. The Entrepreneurship
Development Centres (EDCs) of the Central Bank of Nigeria are encouraged
to ensure that at least 40 per cent of participants are women. As at
December 2015, a total of 8,707 women had been trained in the EDCs,
which amounts to 38.8 per cent of all participants, almost reaching the
target. Regarding the encouragement of women entrepreneurs to become
agents, sensitization campaigns took place in 2015 to enable women
embrace this line of business.
In order to reduce the financial exclusion rate among women, financial
services providers need to design financial products specifically customized
to the needs of women.
3.3.5. Children and Youth Initiatives
Similar to women initiatives, specific measures targeted to children and youth
present another enabler in the National Financial Inclusion Strategy. This is
because the financial exclusion rate among the youth segment has been
higher than the national financial exclusion rate. As at 2014, 47.4 per cent of
the population within the 18 to 25 years age bracket were financially
excluded, which was 20 per cent higher than the national financial exclusion
rate of 39.5 per cent (EFInA, 2014).
Even though the targets defined in the NFIS focus on the adult population of
Nigeria, children are a target segment for financial inclusion initiatives too.
Indeed, financial literacy campaigns targeting minors, aged less than 18, are
relevant at least for two reasons. First, minors themselves will be adults in the
future. Educating them about the functions and benefits of formal financial
services today will increase the likelihood of them using formal financial
services when they turn 18. Second, minors may educate their parents,
siblings or other relatives. Parents or other relatives may actually be less
financially literate than their children, which is why teaching the children
Page 62
about financial services could have a domino effect on target groups in
other age brackets too.
The National Financial Inclusion Strategy defined two key initiatives
addressing children and the youth, namely the development and
implementation of a framework for child and youth finance, and the
implementation of children and youth financial literacy initiatives in Nigerian
educational institutions.
One of the four National Financial Inclusion Working Groups which were
inaugurated in 2015, is the Special Interventions Working Group, which
targets the youth as one of three priority population segments. In the year,
the Working Group defined an action plan with specific initiatives targeting
the youth segment. Additionally, the Curriculum Development Working
Group was established under the Financial Literacy Working Group to
develop financial literacy curricula for primary and senior secondary schools
in Nigeria.
In order to improve the financial exclusion rate of Nigerian youths, targeted
financial literacy programmes and financial services need to be designed
which specifically address the needs of young Nigerians.50
50 Please note that the NFIS reported that it should be ensured that 50 per cent of the 4 million new adults
every year are financially included. This has not been measured regularly so far, but as at 2014, 44 per cent of
the 18-year olds captured in EFInA (2014) were financially included. However, the sample is not necessarily
representative of the national population of 18-year olds.
Page 63
CHAPTER FOUR
4. STAKEHOLDER ACTIVITIES
Three categories of stakeholders, namely providers, enablers and supporting
institutions, participate actively in the implementation of the National
Financial Inclusion Strategy. This chapter gives an overview of activities of
each stakeholder group in the year under review.
4.1. Providers
Providers include institutions that provide financial products and services, as
well as their partner infrastructure and technology.
In 2015, providers engaged in financial inclusion campaigns aimed at
enlisting new customers and providing quality services. Some providers
established financial inclusion desks in their corporate head offices to
implement their financial inclusion agenda. In specific terms, they:
1. Developed and rolled out new financial inclusion products targeted at
low-income clients;
2. Participated in the Global Money Week and financial literacy
campaigns on financial services and products;
3. Engaged in school mentoring to stimulate students’ interest in
accessing and using formal financial products and services.
4.1.1. Bankers’ Committee
During the year under review, the Bankers’ Committee continued to render
financial services to the Nigerian population. The Financial Inclusion
Secretariat held a workshop with Heads of Strategies of Deposit Money Banks
to discuss their financial inclusion activities and develop necessary business
plans on financial inclusion.
4.1.2. Fund Managers’ Association of Nigeria
The assets under management of the Fund
Management Industry increased from N156 billion in 2014
to N264 billion in 2015, representing a 69 per cent
increase. Also, new mutual funds and five new Exchange
Traded Funds (ETFs) were launched by Fund Managers to
increase the options available to retail investors and
increase financial inclusion.
Ms. Ore Sofekun
President, Fund Managers’
Association of Nigeria
Page 64
4.1.3. Association of Non-Bank Microfinance Institution
The Association of Non-Bank Microfinance Institutions
(ANMFIN) recorded a significant increase in its
customer base from 3,590,660 in 2014 to about four
million in 2015. At the end of 2015, 70.4 per cent of its
customers were female, while only 29.6 per cent were
male. In 2015, ANMFIN initiated a five-year strategic
planning process that was prompted by the Rural
Finance Institution Building Programme (RUFIN). The
focus of the plan is to restructure ANMFIN to become
a viable and sustainable microfinance network in
Africa by 2020 and to chart a road map for
actualizing its new mandate of sustaining non-bank rural finance institutions
upon RUFIN’s exit.
4.1.4. Pension Funds Operators Association of Nigeria
In 2015, the Pension Funds Operators Association of
Nigeria (PenOp) drove a very intensive branding
campaign on its activities on the radio, press and social
media across the nation, as well as held stakeholder
fora in collaboration with the National Pension
Commission. The essence of the branding campaign
was to educate the general public on the importance
of preparing for retirement and having a pensions
account.
The Association intends to use the Micro Pension Plan
once the guidelines have been finalized by the
National Pension Commission.
4.1.5. Nigerian Insurers Association
The Nigerian Insurers Association (NIA) is an umbrella
organization for insurance companies in Nigeria. In line
with its mandate to develop an inclusive insurance
market in Nigeria, the Association established a “Micro
Insurance Technical Committee” strategically
positioned to promote microinsurance business
among its members. Microinsurance is the provision of
insurance services to the low income segment of the
society at affordable cost. In 2015, the Committee
organized seminars, conferences/meetings and fairs
Mr. Eguarekhide Longe
President, Pension Funds
Operators Association of Nigeria
Honourable Hamid Giwa Afolabi
President, Association of Non-
Bank Microfinance Institutions
Mr. Thomas O.S.
Director General, Nigerian
Insurers Association
Page 65
to enhance collective knowledge sharing among member companies. For
instance, the Association organized a one-day Microinsurance Fair in the last
quarter of 2015 titled “Making insurance work for the informal sector”.
4.1.6. Bank of Industry
Bank of Industry (BOI) has established a gender desk to
mainstream initiatives to deepen financial inclusion
amongst women. One of the initiatives launched by the
Bank in 2015 was the Bank of Industry Fashion Fund.
Under the scheme, women entrepreneurs in the fashion
industry can apply for up to one million naira without
collateral to invest in their fashion businesses.
4.2. Enablers
Enablers are regulators and public institutions including the Central Bank of
Nigeria (CBN), the National Pension Commission (PenCom), the National
Insurance Commission (NAICOM), the Securities and Exchange Commission
(SEC), the Nigerian Communications Commission (NCC), the Nigeria Deposit
Insurance Corporation (NDIC), and the National Identity Management
Commission (NIMC). Their activities in 2015 are outlined in this section.
4.2.1. Regulators
4.2.1.1. Central Bank of Nigeria
Progress made by CBN Departments and Units
include the following:
Financial Inclusion Secretariat:
The Secretariat held a workshop with Heads of
Strategy of deposit money banks to define their future
financial inclusion activities and a four-day financial
inclusion capacity building workshop for stakeholders
to enhance their understanding of financial inclusion
matters.
The Secretariat also coordinated the second round of the Geospatial
Mapping Survey of financial services access points in Nigeria which was
Mr. Godwin Emefiele
Governor, Central Bank of Nigeria
Mr. Waheed A. Olagunju
Ag. Managing Director, Bank of Industry
Page 66
conducted by a South African consultancy firm. The project was jointly
funded by CBN and the Bill & Melinda Gates Foundation. An overview of the
number of operational and non-operational access points51 captured during
the exercise is provided in Figure 17 and Table 24.52
Out of 37,449 access locations (excluding ATMs), 29,527 (78.8 per cent) were
operational and 7,922 (21.2 per cent) were non-operational. The largest
proportions of non-operational points were mobile money agents (only 43.2
per cent operational and engaging in mobile money activities). With respect
to Automated Teller Machines (ATMs), a total of 14,048 machines were
captured out of which 95.3 per cent were operational. The percentage of
operational ATMs was higher for on-site ATMs (97.3 per cent) than for off-site
ATMs (81.2 per cent). The highest number of access points was those of
mobile network operators (MNOs) with 8,912, representing 23.8 per cent of
the total access points captured. This showed their potential in providing
financial access to Nigerians as agents of banks and mobile money
operators.
Figure 17: Number of Operational and Non-Operational Financial Access Points
Captured during the 2nd Round of the Geospatial Mapping Survey (CBN, 2015)
The total number of mobile money agent locations captured was 8,257 (22.0
per cent), out of which only 43.2 per cent were actually engaging in mobile 51
Non-operational locations are locations which were found to be unavailable for business at the time of
data collection. Unavailable does not mean that locations were only closed for a particular day or week, for
instance due to maintenance work, but were perceived to remain out of business for a longer time. Please
note that only for mobile money agent locations, non-operational locations are differently defined. Non-
operational mobile money agent locations refer to locations where the agent had actually not been
activated to perform mobile money activities, while the agent’s business may or may not have been running.
52 Please note that the numbers may differ from the ones provided in Chapter 3. This is because the
Geospatial Mapping Survey was conducted between November 2014 and April 2015, while the figures
provided in Chapter 3 provide a status update as at December 2015. Also, 39 of the 774 LGAs in the country
were not captured because of security issues.
408
486
567
844
900
869
1,013
1,126
1,640
1,999
2,586
4,989
3,567
8,533
103
27
322
84
90
238
621
556
221
41
33
517
4,690
379
Other
Pension Fund Administrator Branches
SEC Locations (Brokers)
Microfinance Institution Branches
Insurance Company Branches
Off-site ATM Locations
Post Offices (including postal agencies)
Bureaux de Change (BDC) Locations
Microfinance Bank Branches
Motor Parks
Markets
Deposit Money Bank Branches
Mobile Money (MM) Agent Locations
Mobile Network Operator (MNO) Locations
Operational
Non-Operational
Page 67
money activities. As for deposit money bank branches, a total of 5,506
branches (14.7 per cent) was captured. Most of the branches were located
in the South West region (see Figure 10 and Table 18 in section 3.2.1.). The
branches of microfinance banks were only 5.0% of the total access points
captured.
Table 24: Number of Financial Access Points Captured during the 2nd Round of the
Geospatial Mapping Survey (CBN, 2015)
S/N Type of Access Location Access
Locations
Captured % of Total
Operational Access
Locations Captured
(% Operational) % of Total
Operational
1 Mobile Network Operator (MNO) Locations 8,912 23.8% 8,533 (95.7%) 28.9% 2 Mobile Money(MM) Agent Locations 8,257 22.0% 3,567 (43.2%) 12.1% 3 Deposit Money Bank Branches 5,506 14.7% 4,989 (90.6%) 16.9% 4 Markets 2,619 7.0% 2,586 (98.7%) 8.8% 5 Motor Parks 2,040 5.4% 1,999 (98.0%) 6.8% 6 Microfinance Bank Branches 1,861 5.0% 1,640 (88.1%) 5.6% 7 Bureaux de Change (BDC) Locations 1,682 4.5% 1,126 (66.9%) 3.8% 8 Post Offices (Including postal agencies) 1,634 4.4% 1,013 (62.0%) 3.4% 9 Off-site ATM Locations 1,107 3.0% 869 (78.5%) 2.9%
10 Insurance Company Branches 990 2.6% 900 (90.9%) 3.0% 11 Microfinance Institution Branches 928 2.5% 844 (90.9%) 2.9%
12 Securities and Exchange Commission
Locations (Brokers) 889 2.4% 567 (63.8%) 1.9%
13 Pension Fund Administrator Branches 513 1.4% 486 (94.7%) 1.6% 14 Primary Mortgage Bank Branches 227 0.6% 177 (78.0%) 0.6% 15 Development Finance Bank Locations 158 0.4% 136 (86.1%) 0.5% 16 Finance Company Locations 78 0.2% 47 (60.3%) 0.2% 17 Commercial Bank Agent Locations 48 0.1% 48 (100.0%) 0.2%
Total # of Financial Access Locations 37,449 100.0% 29,527 (78.8%) 100.0% 18 Individual ATMs On-Site at Bank Branches 12,337 87.8% 12,000 (97.3%) 89.6% 19 Individual ATMs at Off-Site Locations 1,711 12.2% 1,389 (81.2%) 10.4%
Total # of Individual ATMs (On-Site and Off-Site) 14,048 100.0% 13,389 (95.3%) 100.0%
During the period under review, the Financial Inclusion Secretariat undertook
follow-up visits to priority States, including Cross River, Ebonyi, Jigawa, Kano,
Ogun, Osun, and Rivers States to assess the National Financial Inclusion
Strategy implementation progress. During the visits specific actions that will
enhance implementation and improve access to finance were agreed
upon.
Page 68
Banking and Payments System Department:
The Banking and Payments System Department developed an agent
database to capture agent activities, issued the Regulatory Framework for
Licensing Super-Agents in Nigeria to stimulate the market and support
increased uptake of agent banking in Nigeria, and released the Guidelines
on Mobile Money Services in Nigeria to ensure a structured and orderly
development, promote safety and effectiveness, and enhance user
confidence and services in mobile money services in Nigeria.
Consumer Protection Department:
The Consumer Protection Department released the National Financial
Literacy Framework to provide a structured environment for increasing the
level of financial literacy amongst Nigerians and published the report of the
Nigeria Financial Literacy Baseline Survey. The Baseline Survey revealed that
awareness on financial products was low, while the majority (58 per cent of
those surveyed) did not have risk management plans in place. It also
revealed that most Nigerians had a more positive attitude towards savings
than loans.
Other major activities conducted by the Department included the School
Outreach Programme in conjunction with the Bankers’ Committee and the
celebration of the Global Money Week in 2015, coordination of the
development of the financial literacy curricula for primary and secondary
schools, and the development of the Consumer Protection Framework,
including a guide on bank charges, to increase the protection of customers
against excessive and erroneous charges.
Development Finance Department:
The Department reviewed the Micro, Small, and Medium Enterprises
Development Fund Guidelines to include concessions for start-ups that allow
for the use of educational certificates such as NYSC as collaterals. It also
conducted extensive awareness campaigns on the processes for accessing
the MSME Development Fund. The reviewed MSMEDF Guidelines allow
venture capital firms to participate in the utilization of the Fund. The
Department also continued its partnership with RUFIN/IFAD on rural business
plans with microfinance banks and institutions to facilitate access to finance
among the rural population.
Other Financial Institutions Supervision Department:
The Department undertook financial literacy and education initiatives in
collaboration with the National Association of Microfinance Banks (NAMB) in
order to mobilize savings and enhance access to credit through their
Page 69
Mr. Mohammed Kari
Commissioner for
Insurance, National
Insurance Commission
members. It also worked on incentives for MFBs to penetrate areas through
the establishment of rural branches.
4.2.1.2. National Pension Commission
The pension reform in Nigeria has focused mainly on the
formal sector, which covered about 7.1 million
employees as at December 2015. However, the informal
sector, which is at least five times the size of the formal
sector, remains uncovered by the Nigerian Pension
scheme. To this end, a survey that would facilitate the
participation of the informal sector in the Contributory
Pension Scheme (CPS) was conducted. The Commission
commenced the review of the Regulation on
Investment of Pension Assets which is expected to boost
participation of persons working in the informal sector and increase
coverage of the scheme.
The Commission engaged recovery agents to recover all outstanding
contributions from 15,000 employers of labour that either did not register their
employees into the CPS or were not making full remittance of contributions
into the Retirement Savings Accounts (RSAs) of their employees. It obtained
the support of the Federal Government to make it mandatory for all bidders
for contracts from any Federal Government Agency to provide evidence of
implementing the CPS. The National Pension Commission plans to harmonise
and integrate the PenCom database with the national identity platform to
ensure complete synergy with the National Identity Management
Commission.
4.2.1.3. National Insurance Commission
The National Insurance Commission (NAICOM)
undertook a diagnostic study in support of the
development of action plans to facilitate the
implementation of microinsurance in the country.
Pursuant to this, the agency launched the Takaful and
Microinsurance Guidelines in November, 2013. To
support implementation, a Microinsurance Steering
Committee was constituted in January 2014. In 2015,
efforts were made to promote necessary financial
literacy through several awareness programmes to
ensure the accelerated adoption of microinsurance products in Nigeria.
Mrs. Chinelo Anohu-Amazu
Director General, National
Pension Commission
Page 70
Examples of organizations that launched microinsurance products in 2015
include Airtel, MTN, Lapo Microfinance Bank, Paga, and Delta State
Government.
4.2.1.4. Securities and Exchange Commission
The focal point for the financial inclusion agenda and
access to capital market products by the excluded
population of Nigeria of the Securities and Exchange
Commission (SEC) is the use of collective investment
schemes and non-interest capital market products.
SEC established a Financial Inclusion Division and
launched a capital market master plan (2015-2025)
that encapsulates financial inclusion objectives.
Benchmarking on the Central Bank of Nigeria
financial inclusion strategy, the SEC is working on a
Capital Market Financial Inclusion Strategy that will
provide a framework and blueprint to guide the activities of participants in
the market. It is also working on appropriate channels that will support the
uptake of capital market products in the future.
4.2.1.5. Nigerian Communications Commission
Over the years, the Nigerian Communications
Commission (NCC) has earned a reputation as a
foremost telecom regulatory agency in Africa. The
Commission is making efforts to catalyse the use of
information and communication technology for
different aspects of national development. In order to
engender needed efficiency, NCC made progress in
initiating a regulatory framework that fosters service
availability, optimal service experience, adherence
to standards, clarity, simplicity and consistency in
operation and pricing of mobile payment services by
mobile network operators. In addition, the
Commission has auctioned spectrum in the 2.3GHz
band and is at the verge of auctioning spectra in the 2.6GHz band. Its aim is
to achieve 30 per cent broadband penetration by 2018. The Commission is
encouraging the rollout of sites in unsecured and underserved areas which
will promote financial inclusion.
Professor Umar Garba
Danbatta
Executive Vice Chairman,
Nigerian Communications Commission
Mr. Mounir Gwarzo
Director General, Securities
and Exchange Commission
Page 71
4.2.1.6. Nigeria Deposit Insurance Corporation
As part of its contribution to the financial Inclusion
project in Nigeria, the Nigeria Deposit Insurance
Corporation (NDIC) extended deposit insurance
coverage to subscribers of mobile money operators.
This is to engender confidence in the mobile
payment services and promote financial inclusion. In
the same vein, the organization provided deposit
protection for customers of deposit money banks,
microfinance banks, primary mortgage banks and
non-interest banks. It has also drafted a curriculum for teaching deposit
insurance and other financial literacy modules in Nigerian universities and
plans to collaborate with the National Universities Commission to implement
it.
4.2.1.7. National Identity Management Commission
In order to enhance the implementation of the
Financial Inclusion Strategy in Nigeria, the National
Identity Management Commission (NIMC) is working
on a unified database to ease identification of
Nigerians for the purpose of financial and other
documentations.
Banks and other financial institutions would be able
to leverage on this platform to undertake the Know
Your Customer (KYC) requirements. The platform will
also help to enhance the Nigerian consumer credit system and support
lending for economic activities by the excluded population in Nigeria.
4.2.2. Government Ministries and Agencies
4.2.2.1. Federal Ministry of Finance
The Ministry partnered with CBN and the Bill &
Melinda Gates Foundation (BMGF) on the
implementation of the Digital Financial Inclusion
Project. The Public Private Partnership (PPP) division of
the Ministry took active part in the Nigerian Postal
services (NIPOST) financial inclusion project. In 2015, a
contract was signed with a Bangladesh-based
consultancy firm to provide advisory services on the
project. The contract is a prerequisite for the next
phase, which will involve the rehabilitation of the
post offices across the country. The Youth
Employment and Social Support Operations (YESSO) Unit of the Ministry also
Alhaji Umaru Ibrahim MD/CEO,
Nigeria Deposit Insurance
Corporation
Engr. Aliyu Aziz
Director General, National
Identity Management
Commission
Mrs. Kemi Adeosun
Honourable Minister of Finance
Page 72
collected data on the poor and vulnerable in the Federal Government Single
Register Database to support the disbursement of the Government Social
Protection Programmes. The compilation of the database was done in
collaboration with the World Bank which provided a grant of USD300 million.
4.2.2.2. Federal Ministry of Communications
In 2015, the technology infrastructure required for
deepening financial inclusion was given priority by the
Ministry with States signing up to the SMART campaign.
The initiative aims at reducing multiple taxation
suffered by players in the internet infrastructure
provision space.
4.2.2.3. Federal Ministry of Women Affairs & Social Development
The Ministry established the Women Fund for Economic
Empowerment (WOFEE) in order to increase access to
loans for women farmers in rural areas. WOFEE is a credit
facility for economic empowerment of grass root
women cooperatives set up in collaboration with the
Bank of Agriculture. It also created the Business
Development Fund in collaboration with the Bank of
Industry.
4.2.2.4. Federal Ministry of Youth Development
With a vested interest in the social and economic
inclusion of the Nigerian youth (18 to 35 years old), the
Ministry paid particular attention to empowerment
programmes such as the Youth Employment In
Agriculture Programme (YEAP). In 2015, the Ministry
empowered 30,000 Nigerian youths under the first phase
of the programme. Participating States included Akwa
Ibom, Bauchi, Gombe, Imo, Kaduna, Kastina, Lagos,
Niger, Ogun and the FCT. In addition to this, the
implementation of other programmes such as YouWin,
Barr. Adebayo Shittu
Honourable Minister of
Communications
Senator Aisha Jummai
Alhassan
Honourable Minister of
Women Affairs and Social
Development
Barr. Solomon Dalong
Honourable Minister of Youth
Development
Page 73
SURE-P and other agropreneur programmes continued during the year.
4.2.2.5. Nigerian Postal Service
NIPOST started agency banking in three States of the
Federation as a pilot. Payments for utility bills, including
school fees, can now be made in some post offices in
Nigeria.
4.3. Supporting Institutions
Supporting institutions provide technical and funding assistance to enhance
financial inclusion in the country. This section describes their key activities in
2015.
4.3.1. Alliance for Financial Inclusion
The Alliance for Financial Inclusion (AFI) became an
independent organization, owned by its member
institutions, in 2015 as it was registered as an
international organization in Malaysia under the
International Organizations Act 1992 at the end of the
year.
In the year under review, the organization engaged in
its Peer Learning Program with Standard-Setting
Bodies, advocated for the role of SMEs in financial
inclusion as an implementation partner in the Global
Partnership for Financial Inclusion, and discussed financial inclusion issues
affecting AFI’s members with the G-24.
AFI also continued to support its members in national financial inclusion
policy making with 57 institutions making Maya Declaration commitments
and setting 81 measurable targets in 2015.
Capacity-building was provided through various means, including thematic
working groups, joint learning programs, knowledge exchange programs,
peer advisory services, regional initiatives, and the Global Policy Forum.
Mr. Asiwaju A. Adegbuyi
Postmaster General / CEO,
Nigerian Postal Service
Mr. Alfred Hannig
Executive Director,
Alliance for Financial Inclusion
Page 74
At the Global Policy Forum in Maputo, Mozambique in September 2015,
members adopted the Maputo Accord which makes SME finance a priority,
given SMEs’ crucial role in driving a country’s employment, economic
development and innovation.
4.3.2. Bill & Melinda Gates Foundation
In 2015, the Bill & Melinda Gates Foundation
collaborated with the Central Bank of Nigeria to
jointly fund the second round of geospatial mapping
of financial access points (see sections 3.2.1. and
4.2.1.1. for key results). The outcome of the exercise
was the publication of the Financial Access Points
Atlas in December 2015. The live maps can be
accessed on www.fspmaps.com. Additionally, the
Foundation partnered with the Central Bank of
Nigeria and the Federal Ministry of Finance to kick-off the Digital Financial
Inclusion Project.
4.3.3. Enhancing Financial Innovation & Access
Enhancing Financial Innovation & Access (EFInA) provided technical support
to the Financial Inclusion Secretariat in the year. In 2015,
EFInA conducted a number of financial inclusion-related
surveys. One of the surveys, which was titled “Mobile
Money Agent Survey”, identified ways to drive
deployment of widespread agent networks and increase
usage of mobile money services, and created
understanding of mobile money agents’ operations, the
challenges faced, and the motivation for becoming
mobile money agents.53 Another survey was titled “The
landscape of financial inclusion and microfinance in
Nigeria”. The survey highlighted reasons for the low penetration of
microfinance banks in Nigeria and factors that will encourage the usage of
microfinance banks by current non-users.54
4.3.4. Deutsche Gesellschaft fuer Internationale Zusammenarbeit
Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) was
instrumental to a number of developmental programmes targeted at
empowering the poor in the year. This was achieved primarily through the
53 Key findings of the study are available here:
http://www.efina.org.ng/assets/ResearchDocuments/OtherResearch/EFInA-Agent-Survey-Key-Findings.pdf.
Accessed in June 2016.
54 The report can be accessed at:
http://www.efina.org.ng/assets/ResearchDocuments/OtherResearch/EFInAThe-Landscape-of-Financial-
Inclusion-and-Microfinance-in-Nigeria.pdf. Accessed in June 2016.
Dr. Sue Desmond-Hellmann
Chief Executive Officer,
Bill & Melinda Gates Foundation
Ms. Modupe Ladipo
Chief Executive Officer,
Enhancing Financial
Innovation & Access
Page 75
collaboration with key stakeholders in both, the private and public sector, to
foster skills acquisition and finance micro enterprises.
The project which particularly targeted financial
inclusion was the Pro-poor Growth and Promotion of
Employment in Nigeria (SEDIN) Programme. It aims at
increasing income-generating employment in micro,
small and medium-sized enterprises (MSMEs), and
improving access to financial services with pilots in
Abuja, Niger, Ogun and Plateau States.
Under the SEDIN programme, GIZ supported 14 MFBs
from Ogun, Niger and Plateau to carry out financial
literacy activities, and 15 MFBs with promotional items
and radio jingles. The agency also embarked on a
financial literacy radio programme tagged “Talk Moni” in Niger and Ogun
States to educate the public on savings, wonder banks, MFBs, investment,
and bookkeeping.
Other programmes executed by the agency includes financial literacy road
shows on “E Go Better – The Microfinance Way” in Mangu, Pankshin, Jos
North and Jos South Local Government Areas. “E Go Better – The
Microfinance Way” is a financial literacy movie that educates the audience
on financial matters like savings, loans and how microfinance works. A total
of between 100 and 150 people participated per road show.
Also, the agency supported the development of financial literacy materials
to train MSMEs, farmers, women groups and youths in partner States as well
as group lending training with microfinance banks. The group lending
programme addressed topics such as:
1. Understanding the principles of group lending in microfinance
2. Risk management in group lending
3. Corporate governance in group lending
4. Understanding group lending from group mobilization/formation to
administration and monitoring
5. Field exercise: Meeting with loan groups at Fortis MFB’s Group Centers
6. Drafting group lending policy per individual bank. A clinic session was
held bank by bank to give feedback on the outlined group lending
policy.
4.3.5. Mercy Corps
Mercy Corps implemented projects that link marginalised girls directly to
formal banking services by opening formal accounts for them and ensuring
that these girls register and leverage on the payment features of the National
Identity Management Commission (NIMC) e-ID cards. In 2015, 8,000
Mrs. Tanja Goenner
Chair of the Management
Board, GIZ
Page 76
marginalized girls were brought into the formal banking
sector and over 10,000 girls were registered for the NIMC e-
ID card which can be used to make financial transactions.
This was achieved through the implementation of three
specific projects:
The “ASSETS” (Accelerating Savings and Strengthening
Entrepreneurship through Training and Skills-building)
project, funded by MasterCard Worldwide, has focused
on improving the livelihood and economic assets of 2,500
marginalized adolescent girls in Lagos State and the
Federal Capital Territory.
The “ENGINE” (Educating Nigerian Girls in New Enterprises) project, funded by
The Coca–Cola Company, Department for International Development (DfID)
and NIKE Foundation, aims to reach 18,000 marginalised girls in Kano,
Kaduna, Federal Capital Territory and Lagos States to teach them business
and financial skills.
The “GOAL 2” (Girls Opportunities for Advancing Literacy) program,
supported by the John D. and Catherine T. MacArthur Foundation, has
addressed challenges faced by 1,800 in-school marginalised girls by
improving their learning outcomes and directly supporting girls' increased
control of economic assets through financial education in Kano, Kaduna and
the Federal Capital Territory. GOAL 2 is strengthening government systems to
support girls’ skill building in alignment with the National Policy on Education.
Neal Keny-Guyer
Chief Executive
Officer, Mercy Corps
Page 77
CHAPTER FIVE
5. RECOMMENDATIONS
Towards the implementation of the National Financial Inclusion Strategy, a
range of activities were carried out in Nigeria in 2015. Most financial inclusion
KPI figures in 2015 were an improvement over those of 2014. In order to
achieve the 2020 targets, stakeholders need to accelerate the pace of the
current efforts and interventions. The following measures are particularly
recommended.
Providers:
Further commit to financial inclusion targets: As at 2014, there were
36.9 million adults which were completely excluded from the financial
sector. The population represents huge potential for service providers’
business if they can adopt innovative and commercially viable ways to
serve them. Also, for some providers, such as insurance companies, the
excluded segment is even larger given the low penetration of only one
per cent as at 2014. Services providers should consider expanding into
this segment not only for social reasons, but also in their own interest.
Enhance financial inclusion database: Several data issues have been
pointed out in the report. There is need to collect financial inclusion-
related data and provide reliable and timely data to regulators to
inform policies and interventions.
Focus on dispersion in deployment of financial access points: Financial
access points need to be increased substantially as they are needed
for people to be able to access and use financial services. However,
results of the second round of the Geospatial Mapping Survey of
financial access points showed that 27.3 per cent of all commercial
bank and 14.9 per cent of all microfinance bank branches were
located in Lagos State. The estimated share of the total Nigerian adult
population living in Lagos State was merely 7.5 per cent in 2014. In
addition, 116 out of 735 captured LGAs had neither a commercial nor
a microfinance bank branch. Therefore, providers are encouraged to
analyse existing gaps of financial access points and place emphasis
on these gaps in their deployment of new access points. For instance,
providers are encouraged to make use of the interactive geo-spatial
maps55 for further analysis that could inform management decisions.
Given the capital-intensity of “brick-and-mortar” branches, new
branches should be deployed in areas with a large financially
excluded population with no, or only few access points, particularly the
North East and North West. Additionally, the number of agents should 55
Accessible at: www.fspmaps.com. Accessed in June 2016.
Page 78
be expanded substantially in order to supply financial services in a
cost-effective manner even in remote areas.
Take advantage of new technologies: Innovative ways must be found
to reach eight out of ten adult Nigerians by 2020. Mobile phones
represent a low-cost channel to reach even many of the poorest in
rural areas. Mobile channels therefore should be further intensified.
Form partnerships and collaborations: Financial inclusion activities
involve multiple stakeholders. Strong collaborations and partnerships
can help to better reach the excluded population in an efficient and
faster manner. For instance, banks or insurance companies may
collaborate with mobile network operators to leverage on their
customer base and explore the use of mobile phones to deliver
financial services. Commercial banks may partner with microfinance
banks and institutions to provide funds for on-lending to the low-
income segment. Linkage models between banks and informal savings
institutions could provide mutual benefits to both and need to be
taken advantage of. Local governments may provide security support
for branches or ATMs, while apex associations may organize joint
awareness campaigns to increase financial literacy in rural areas.
Enablers:
Deliver on financial inclusion commitments: Even though several
initiatives have been developed in order to achieve the financial
inclusion targets by 2020, it is crucial that regulators and government
ministries, departments and agencies strictly adhere to their
implementation plans. Quantitative targets should be broken down
year-by-year in order to have transparency over the number of adults
that need to be included in each year and quarter rather than in the
next five-year period.
Collate and publish financial inclusion data: In support of the reporting
activities of providers, regulators are encouraged to effectively
collaborate with the Financial Inclusion Secretariat to develop and
adopt appropriate reporting mechanisms to ensure timeliness in
providing needed information on financial inclusion to the Governing
Committees. Necessary software and infrastructure for real time online
reporting will go a long way to address current data gathering and
analysis challenges.
Leverage on new technologies: Regulators and public institutions need
to provide an enabling environment that provides incentives for
services providers to use new technologies, such as mobile phones and
the internet. Progress made on the implementation of relevant
guidelines in this respect, such as the ones on mobile payments and
Page 79
super-agents, should be monitored. Government agencies at all levels
should endeavour to digitize payments, such as salaries, subsidies, or
cash transfers, and by this, draw the financially excluded to make use
of formal financial services, achieve transparency and save costs.
Supporting institutions:
Coordinate with various stakeholders to maximize impact: Financial
inclusion has linkages between many different stakeholders in multiple
sectors. Supporting institutions, such as donor organizations and
research institutions, should base their assistance on adequate analysis
of the environment, and consider what other partners are doing so as
to ensure synergy and complementarity. The Financial Inclusion
Secretariat should be consulted in designing projects so that assistance
is provided in a way that maximizes impact on financial inclusion.
Page 80
CHAPTER SIX
6. CONCLUSION
The National Financial Inclusion Strategy was launched on 23rd October, 2012
to provide a road map for increasing the level of access to financial services
by Nigerians, and by so doing, improve living standards of the populace. The
launch of the Strategy and the steps undertaken to implement it have not
only created awareness on the need for increased financial access by the
population, but has elicited concerted stakeholder actions in performing
their avowed roles and responsibilities. The Report has described various
initiatives in different industries, such as those in the banking, the
microfinance, the insurance and the pension sectors, in 2015. The financial
inclusion trend has been positive since 2012.
Nevertheless, gaps exist between the actually achieved values and the
targets set for 2015 for several key performance indicators. The current
economic situation, particularly the low oil price, fiscal constraint and limited
economic growth, does not provide the most favourable environment for
financial inclusion to thrive. However, financial inclusion is a driver of
economic development and as such, all stakeholders need to commit more
resources to the implementation plans. The recommendations made in the
Report, if implemented, will support economic growth, job creation, and
poverty reduction at the macro-level, and assist individuals in improving their
financial opportunities, income and standard of living.
With concerted efforts on the part of financial services providers, regulators,
government ministries, departments, and agencies, and development
partners, eight out of ten adults Nigerians should have access to and make
use of financial services by the year 2020 as stipulated in the National
Financial Inclusion Strategy.
Central Bank of Nigeria
September, 2016
Page 81
7. APPENDIX
Appendix 1: Composition of the National Financial Inclusion Steering Committee,
Technical Committee, and Working Groups
Members of the National Financial Inclusion Steering Committee:
Governor, Central Bank of Nigeria (Chairman)
President, Association of Licensed Mobile Money Operators
President, Association of Non-Bank Microfinance Institutions
Member, Bankers’ Sub-Committee on Economic Development,
Gender & Sustainability
Member, Bankers’ Sub-Committee on Financial Literacy & Public
Enlightenment
Chief Executive Officer, Enhancing Financial Innovation & Access
Honourable Minister, Federal Ministry of Communications
Honourable Minister, Federal Ministry of Education
Honourable Minister, Federal Ministry of Finance
Honourable Minister, Federal Ministry of Information
Honourable Minister, Federal Ministry of Women Affairs & Social
Development
President, Fund Managers Association of Nigeria
President, National Association of Microfinance Banks
Statistician General, National Bureau of Statistics
Director General, National Identity Management Commission
Commissioner for Insurance, National Insurance Commission
Director General, National Pension Commission
Managing Director, Nigeria Deposit Insurance Corporation
Chief Executive Officer, Nigerian Communications Commission (NCC)
Director General, Nigerian Insurers Association
Post Master General, Nigerian Postal Service
Managing Director, Nigerian Stock Exchange
President, Pension Fund Operators Association of Nigeria
Director General, Securities and Exchange Commission
Head, Financial Inclusion Secretariat, Central Bank of Nigeria
(Secretary)
Member Institutions/Departments of the National Financial Inclusion
Technical Committee:
Deputy Governor, Financial System Stability, Central Bank of Nigeria
(Chairman)
Association of Licensed Mobile Money Operators
Association of Non-Bank Microfinance Institutions
Bankers’ Sub-Committee on Economic Development, Gender &
Sustainability
Bankers’ Sub-Committee on Financial Literacy & Public Enlightenment
Central Bank of Nigeria, Banking and Payments System Department
Central Bank of Nigeria, Banking Supervision Department
Central Bank of Nigeria, Branch Operations Department
Page 82
Central Bank of Nigeria, Consumer Protection Department
Central Bank of Nigeria, Development Finance Department
Central Bank of Nigeria, Financial Policy and Regulation Department
Central Bank of Nigeria, Monetary Policy Department
Central Bank of Nigeria, Other Financial Institutions Supervision
Department
Central Bank of Nigeria, Research Department
Central Bank of Nigeria, Shared Services Office
Central Bank of Nigeria, Statistics Department
Central Bank of Nigeria, Strategy Management Department
Enhancing Financial Innovation & Access
Federal Ministry of Communications
Federal Ministry of Education
Federal Ministry of Finance
Federal Ministry of Information
Federal Ministry of Women Affairs & Social Development
Federal Ministry of Youth Development
Fund Managers Association of Nigeria
National Association of Microfinance Banks
National Bureau of Statistics
National Identity Management Commission
National Insurance Commission
National Pension Commission
Nigeria Deposit Insurance Corporation
Nigerian Communications Commission
Nigerian Insurers Association
Nigerian Postal Service
Nigerian Stock Exchange
Pension Fund Operators Association of Nigeria
Securities and Exchange Commission
Head, Financial Inclusion Secretariat, Central Bank of Nigeria
(Secretary)
Member Institutions/Departments of the National Financial Inclusion Channels
Working Group:
Central Bank of Nigeria – Branch Operations Department (Chairman)
Central Bank of Nigeria – Banking and Payments System Department
Central Bank of Nigeria – Shared Services Office
Central Bank of Nigeria – Statistics Department
Federal Ministry of Communications
Federal Ministry of Information
Fund Managers Association of Nigeria
National Association of Microfinance Banks
National Bureau of Statistics
Nigerian Communications Commission
Nigerian Insurers Association
Nigerian Postal Service
Pension Fund Operators Association of Nigeria
Page 83
Central Bank of Nigeria – Financial Inclusion Secretariat (Secretary)
Member Institutions/Departments of the National Financial Literacy Working
Group:
Central Bank of Nigeria – Consumer Protection Department
(Chairman)
Bankers’ Committee – Sub-Committee on Economic Development,
Gender & Sustainability
Bankers’ Committee – Sub-Committee on Financial Literacy & Public
Enlightenment
Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ)
Federal Ministry of Communications
Federal Ministry of Education
Federal Ministry of Finance
Federal Ministry of Information
LYNX-Nigeria
Mercy Corps
National Pension Commission
Nigerian Insurers Association
Nigerian Stock Exchange
Securities and Exchange Commission
Central Bank of Nigeria – Financial Inclusion Secretariat (Secretary)
Member Institutions/Departments of the National Financial Inclusion Products
Working Group:
Nigeria Deposit Insurance Corporation (Chairman)
Association of Licensed Mobile Payment Operators
Association of Non-Bank Microfinance Institutions
Central Bank of Nigeria – Banking and Payments System Department
Central Bank of Nigeria – Banking Supervision Department
Central Bank of Nigeria – Financial Policy and Regulation Department
Central Bank of Nigeria – Other Financial Institutions Supervision
Department
Central Bank of Nigeria – Special Adviser to the Governor on Economic
Matters
Federal Ministry of Finance
Fund Managers Association of Nigeria
National Identity Management Commission
National Insurance Commission
National Pension Commission
Nigerian Postal Service
Securities and Exchange Commission
Central Bank of Nigeria – Financial Inclusion Secretariat (Secretariat)
Page 84
Member Institutions/Departments of the National Financial Inclusion Special
Interventions Working Group:
Central Bank of Nigeria – Special Adviser to the Governor on
Sustainable Banking (Chairman)
Bank of Industry
Central Bank of Nigeria – Consumer Protection Department
Central Bank of Nigeria – Development Finance Department
Central Bank of Nigeria – Special Adviser to the Governor on
Development Finance
Central Bank of Nigeria – Special Assistant to the Governor on Public
Policy
Central Bank of Nigeria – Statistics Department
Central Bank of Nigeria – Strategy Management Department
Enhancing Financial Innovation & Access
Federal Ministry of Education
Federal Ministry of Women Affairs & Social Development
Fund Managers Association of Nigeria
National Insurance Commission
Nigerian Postal Service
Nigerian Stock Exchange
Theseabilities
Central Bank of Nigeria – Financial Inclusion Secretariat (Secretary)
Page 85
Appendix 2 – Overview of Financial Inclusion Key Performance Indicator Groups as
defined in the National Financial Inclusion Strategy
Key Performance
Indicator Group
Examples of Key
Performance Indicators
Comments on Consideration of Key
Performance Indicator Group
Access to
Financial Services
Number of ATMs per
100,000 adults
Number of POS devices
per 100,000 adults
Indicators of this group have been
measured and a progress update is
provided under Section 3.2.
Ownership/Usage
of Financial
Services
Percentage of adult
Nigerians using a
payment product
Percentage of adult
Nigerians using a savings
product
Indicators of this group have been
measured through the desired or
proxy indicators and a progress
update is provided under Section 3.1.
Affordability Cost of using channels
for delivering financial
services
Interest spread between
savings and credit for
low value accounts
Indicators of this group have not been
measured yet in a structured way from
the supply side. Demand-side surveys,
such as the biennially conducted
Access to Financial Services in Nigeria
Survey conducted by EFInA, cover
information on affordability. For
detailed information, please access
results of the surveys directly.
Appropriateness Reason for not having a
payment product
Reason for not having a
credit product
Indicators of this group are measured
through demand-side surveys such as
the Access to Financial Services in
Nigeria Survey conducted by EFInA.
For detailed information, please
access results of the surveys directly.
Financial Literacy Knowledge of business
cash-flows
Awareness of financial
services offerings
Indicators of this group are measured
through demand-side surveys such as
the National Financial Literacy
Baseline Survey of the CBN or the
Access to Financial Services in Nigeria
Survey conducted by EFInA. Relevant
indicators have been referenced. For
detailed information, please access
results of the surveys directly.
Consumer
Protection
Percentage of over-
indebted clients
Number of resolved
complaints
Indicators of this group have not been
measured yet in a structure way from
the supply side. Demand-side surveys,
such as the Access to Financial
Services in Nigeria Survey conducted
by EFInA, cover some information on
consumer protection. For detailed
information, please access results of
the surveys directly.
Page 86
Appendix 3: Tables of Status Quo Analysis of Initiatives Targeting the Achievement of Financial
Inclusion Key Performance Indicator Targets56
Payments:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Roll out of the
Cashless Policy in
all States of the
Federation
o Cashless policy was rolled
out in six States of the
Federation plus FCT in 2015.
o Public awareness
campaigns on the Cashless
Policy were held in nine
additional States.
o 30 other States are yet to
implement the Cashless
Policy.
o Access points need to be
scaled up for Cashless
Policy to be effective.
o No charges applicable to
deposits as at December
2015 which reduces
incentives for merchants to
deploy PoS devices.
Central Bank of
Nigeria (Shared
Services Office)
Implementation of
the tiered KYC
requirements
o In 2015, banks and other
financial institutions
implemented the three-
tiered KYC requirements.
o Providers raised questions
about the difference
between Tier 2 and Tier 3. In
response, CBN wrote to the
providers clarifying the
issue.
Central Bank of
Nigeria
(Financial Policy
and Regulation
Department)
Increase in public
awareness about
mobile payments
o Public awareness about
mobile payments has been
increased through CBN
harmonized sensitization
campaigns across the
country.
o Uptake and awareness of
mobile money is still low.
Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Savings:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
a national savings
mobilization
programme
o The tender process on a
study about a national
savings mobilization
programme commenced.
o Interested firms submitted
proposals on the study.
o Evaluation of the proposals
is ongoing.
o None at the moment.
Central Bank of
Nigeria
(Financial
Inclusion
Secretariat)
Introduction and
promotion of a
basic “no frills”
savings account
and
o In 2015, banks and other
financial institutions
implemented the three-
tiered KYC requirements.
o Providers raised questions
about the difference
between Tier 2 and Tier 3. In
response, CBN wrote to the
providers clarifying the
Central Bank of
Nigeria
(Financial Policy
& Regulation
Department)
56 Please note that strategies are listed only under the respective indicator(s) which they influence most directly. For
instance, while the implementation of agent banking regulations will also impact the achievement of the payments and
savings targets, it most directly affects the achievement of the agent target. Therefore, it is only listed under the section for
“Agents”.
Page 87
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
implementation of
tiered KYC
requirements
issue.
Policies to support
linkages to
informal savings
groups
o Under the RUFIN
intervention, clients of non-
bank microfinance
institutions have been
linked to Microfinance
Banks on a case-by-case
basis.
o No formal framework in
place yet to support
linkages between the
formal financial sector and
informal savings groups.
Central Bank of
Nigeria
(Development
Finance
Department)
Credit:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
the Micro, Small
and Medium
Enterprises
Development Fund
(MSMEDF)
o Disbursement of funds
gained traction in 2015.
From January to December
2015, N54.370 billion was
disbursed to 325
beneficiaries/projects
through 124 participating
financial institutions.
o Sensitization campaigns of
the public were conducted
in the six geopolitical zones.
o Collateral cover was
reduced from 50% to 30%.
o Low uptake of Participating
Financial Institutions (PFIs) in
accessing the fund.
o Several PFIs (especially
Financial Cooperatives &
NGO-MFIs) do not possess
the prescribed collateral for
accessing the loan.
Central Bank of
Nigeria
(Development
Finance
Department)
Removal of the
minimum reporting
balance for credit
bureaux
o Section 12 of the Revised
MFB Guidelines requires
MFBs to supply information
on all their credits to at least
two licensed credit
bureaux. This in effect
implies that there is no
minimum reporting
balance.
o Many MFBs have not
registered with at least two
credit bureaux as required
due largely to financial
constraints.
o CBN has approved the
payment of the one-off
registration fee for all MFBs
to address the challenge.
Going forward, the
payment of the registration
fee will be made a
condition for the grant of
operating license.
Central Bank of
Nigeria (Other
Financial
Institutions
Supervision
Department)
Initiation of a Land
Reform Act
o Process is ongoing.
o None. Ministry of
Lands, Housing
and Urban
Development
Development of a
collateral registry
for movable assets
that will serve all
o The process of developing
a collateral registry gained
momentum in 2015.
o Stakeholder meetings were
o No issues, first UAT went
smoothly.
Central Bank of
Nigeria
(Development
Finance
Page 88
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
levels of credit held to finalize the registry.
o Consequently, the first level
User Acceptance Test (UAT)
was conducted from 14th
to 18th December, 2015
with participants drawn
from eight financial
institutions comprising
DMBs, MFBs, Finance
Houses and the CBN.
Department)
Promotion of
linkages between
MFBs and DMBs to
obtain wholesale
funding for on-
lending
o Linkages have been
created on a case-by-case
basis.
o No formal framework for this
linkage has been
developed yet.
Central Bank of
Nigeria
(Banking
Supervision
Department)
Implementation of
entrepreneurship
training
o As at December 2015, the
Entrepreneurship
Development Centres
(EDCs) collectively had
trained a total of 22,444
participants.
o In 2015 only, EDCs trained
11,896 participants,
representing 104.4% of the
target of 11,400 to be
trained.
o In 2015, CBN-EDC
operations commenced in
the South-West and North-
East geo-political zones as
approved by Management
of the Bank.
o Some graduates of EDCs
find it difficult to access
credit from the Banks
because of the traditional
collateral requirements.
o Inability to access credit
prevents some of the EDC
graduates from starting any
productive venture.
Central Bank of
Nigeria
(Development
Finance
Department)
Introduction of
credit awareness
programmes to
avoid consumer
over-indebtedness
o Credit awareness
programmes were covered
under CBN’s harmonized
awareness campaigns in
2015.
o Also, the Consumer
Protection Department of
the CBN started developing
a financial literacy
programme for MSMEs and
farmers, which includes
issues related to credit, such
as over-indebtedness.
o None. Central Bank of
Nigeria
(Consumer
Protection
Department)
Implementation of
the NIRSAL
programme
o From January to December
2015, one hundred and
ninety-five (195) requests for
Credit Risk Guarantees
(CRGs) valued at N1 billion
were approved. The CRG
figures showed remarkable
improvement when
compared to 18
o There is lack of adequate
knowledge of agricultural
lending among financial
institutions.
Central Bank of
Nigeria
(Development
Finance
Department)
Page 89
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
guarantees that were
approved for 2014.
Insurance:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Regulatory
enforcement of
compulsory
insurance
products
o A Compliance Certificate is
necessary when a
company is applying for
government contracts.
o Monitoring officers of
NAICOM have visited
business locations to
enforce compliance.
o A provision of the NAICOM
Act 1997 limits the enforcing
powers of the Agency.
o A proposed bill aimed at
correcting this imbalance
has not been passed by the
National Assembly.
National
Insurance
Commission
Usage of banking
agents as
distribution
channels for
insurance
products
o Mobile money operators
and Telcos have started to
use their platform to sell
insurance products.
o The Bancassurance
guidelines which allow
insurance companies to
use banks as a channel to
sell insurance policies are in
development as at
December 2015.
o Partnerships between
insurance companies and
mobile money and mobile
network operators should
be enhanced further.
o Bancassurance guidelines
need to be finalized so that
insurance companies can
build on banks’ customer
base.
National
Insurance
Commission
Diversification of
insurance
products to serve
low-income clients
o NAICOM launched the
Takaful and Microinsurance
Guidelines in November,
2013.
o A Takaful Advisory Council
has been appointed and
inaugurated.
o A Micro Insurance Steering
Committee was
inaugurated in January
2014 to facilitate
implementation and
deepening of
microinsurance in Nigeria.
o In 2015, NAICOM approved
window licenses to 17
insurance companies to
start microinsurance
operations. Additionally, a
microinsurance scheme
was launched in
collaboration with the
Delta State Government.
o Lack of trust of the
financially excluded in the
insurance sector and low
financial literacy with
respect to insurance are
barriers to uptake of
insurance products.
National
Insurance
Commission
Develop a
Consumer
Protection
Framework for the
o NAICOM has set up a
department handling
consumer protection via
complaints management.
o None at the moment.
National
Insurance
Commission
Page 90
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Insurance sector.
o The exposure draft of the
Consumer Protection
Framework is going through
consultation.
Implementation of
the insurance
component of the
NIRSAL
programme
o In collaboration with
Alliance for a Green
Revolution (AGRA), NIRSAL
organized a major
workshop on Innovative
Agricultural Insurance
Products.
o Four insurance companies
are expanding their
insurance portfolio to cover
agricultural insurance.
o Furthermore, a total of 84
Banks’ Agricultural Desks
and Insurance Officers
were trained nationwide
on Agric. Value Chain
Financing. This was done in
collaboration with the
Bankers’ Committee.
o Low participation in
programme.
Central Bank of
Nigeria
(Development
Finance
Department)
Introduction of
insurance literacy
programmes
o NAICOM has implemented
several awareness
programmes in 2015, such
as a TV programme on
insurance.
o NIA organized a
microinsurance fair with the
theme “Making insurance
work for the informal
sector” in 2015.
o High cost of mass
sensitization programmes
such as TV campaigns.
National
Insurance
Commission
Pensions:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
the Pension Reform
Act
o Necessary extant
legislations have been
drafted and are awaiting
approval for
implementation. They
would provide required
guidance in the
implementation of the
provisions of the Act.
o Lesson Notes are being
developed and circulated
to staff of the Commission
to have a working
understanding of the
provisions of the Act.
o No Board in place to
approve the draft
legislations.
National
Pension
Commission
Page 91
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Compulsory
Inclusion of all
States in the
Contributory
Pension Scheme
o As at the end of the third
quarter of 2015, 26 State
Governments had enacted
their Pension Reform Laws
and 10 State Governments
were at the Bill stage.
o None. National
Pension
Commission
Amendment of
regulations to
allow inclusion of
smaller firms and
cooperatives and
associations in the
current pension
scheme
o The Pension Reform Act
2014 lowered the required
number of employees for
an organization to
participate in the
Contributory Pension
Scheme from five to three.
o A survey that would
facilitate the participation
of the informal sector in the
National Pension
Commission Contributory
Pension Scheme (CPS) was
conducted.
o Guidelines on the Micro
Pension Plan, which aims at
expanding pension
coverage to the self-
employed and persons
working in organizations
with less than three
employees, are being
finalized as at December
2015.
o None. National
Pension
Commission
Introduction of
pension
awareness and
literacy
programmes
o The Commission is working
on a MoU with Ahmadu
Bello University, Zaria as a
pilot case on introducing
pension courses in tertiary
institutions in the country.
o Issues which were raised by
the Lecturers of the
University on the draft MoU
are being addressed by the
Commission.
National
Pension
Commission
Development of a
consumer
protection
framework for the
pensions sector
o The Commission in
conjunction with the
operators are working on
an Administrative Service
Charter for the industry,
which will specify the rights
of all stakeholders and how
to protect them.
o This is an important initiative
contained in both the
Corporate and Industry
Strategies.
o None. National
Pension
Commission
Page 92
Deposit Money Bank Branches:
Strategy Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Development of
guidelines for
operating mini-
branches
o This initiative has been
overtaken by branchless
banking initiatives, such as
agent banking and
mobile money services.
o Branchless financial access
points such as bank and
mobile money agents still
need to be scaled up.
Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Microfinance Bank Branches:
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
the revised
microfinance policy
o The microfinance policy
was revised in April 2011.
o Sensitization campaigns
were conducted after its
revision.
o The policy has been
operational since then.
o None. Central Bank of
Nigeria
(Development
Finance
Department)
Creation of
incentives for rural
branch expansion
o The CBN in collaboration
with RUFIN/IFAD
conducted several
capacity building
workshops on rural
business plans for MFBs to
enable them expand their
outreach to rural areas.
o Some beneficiaries of the
program have
commenced the
implementation of rural
business plans which is
presently at the center
stage of the business of
Microfinance Banks (MFB).
o This will enable MFBs
overcome the challenges
and constraints that had
hitherto prevented them
from penetrating rural
areas and doing business.
o As part of a longer term
sustainable strategy,
RUFIN/IFAD has also
sponsored a train-the-
trainer program to
develop a crop of training
service providers to train
and develop a critical
mass of expertise in the
industry and sustain the
program when RUFIN
o Perception of unviable
business model, given the
life style of rural people.
o Lack of understanding of
rural business.
o Most rural people are not in
any formal employment.
o Most banks do not
understand rural business
and structures.
o The major business in the
rural areas is seasonal and
as such undermines the
principle of business
volumes.
Central Bank of
Nigeria (Other
Financial
Institutions
Supervision
Department)
Page 93
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
eventually exits Nigeria in
2016.
o There are also plans to
integrate the rural
business plan training as
part of the
syllabus/curriculum of the
Microfinance Certification
Program.
Increased
promotion of shared
services initiatives
o Shared services have
been promoted as part of
CBN’s harmonized
sensitization campaigns.
o None. Central Bank of
Nigeria (Shared
Services Office)
Investor fora at
state levels to
encourage high-
net-worth
individuals to float
MFBs
o The CBN during the last 3
years held investors’ fora
in collaboration with its
development partners.
o The objective of the
Investment fora was to
acquaint the state
governments on the need
to establish MFBs within
their states given the
uneven distribution of
MFBs in Nigeria. Under the
Microfinance Policy
Framework, the three tiers
of government are
encouraged to establish
MFBs by devoting 1% of
their annual budget to
microcredit initiatives.
o So far, three (3) states
have keyed into the
policy by establishing
MFBs. They are Katsina,
Kano and Niger States.
o Some of the State-owned
MFBs are not viable as their
establishment was politically
motivated, leading to their
poor performance or failure.
o Weak infrastructure.
Central Bank of
Nigeria (Other
Financial
Institutions
Supervision
Department)
ATMs:
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Deployment of
multifunctional
ATMs
o Some banks have already
deployed multifunctional
ATMs that are capable of
taking deposits, as well as
performing bill payments
and funds transfers,
among other functions.
o No formal national strategy
in place to drive
deployment.
Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Revision of the off-
site ATM policy
o The off-site ATM policy has
not been revised as at
December 2015.
o None. Central Bank of
Nigeria
(Banking and
Payments
Page 94
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
System
Department)
Deployment of low-
cost ATMs in rural
areas
o Results of the second
round of the geospatial
mapping survey provide
insights on suitable rural
areas for ATM
deployment. Results have
been made available to
financial service providers.
o No formal national strategy
in place to drive
deployment.
Central Bank of
Nigeria
(Banking and
Payments
System
Department)
PoS:
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Requirement for
mobile network
operators to give
priority to
transaction data
through their
platform to ensure
instant
transaction credits
and debits
o The need for cooperation
of the MNOs in the
ecosystem is being
addressed at the
CBN/NCC Joint Technical
Committee level.
o None. Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Roll out of the
Cashless Policy in
all States of the
Federation
o Cashless policy was rolled
out in six States of the
Federation plus FCT in
2015.
o Public awareness
campaigns on the
Cashless Policy were held
in nine additional States.
o 30 other States are yet to
implement the Cashless
Policy.
o Access points need to be
scaled up for Cashless
Policy to be effective.
o No charges for deposits as
at December 2015 which
reduces incentives for
merchants to deploy PoS
devices.
Central Bank of
Nigeria (Shared
Services Office)
Expansion of the
Evidence Act so
that e-payments
are accepted as
evidence in court
o The Act has been
amended and e-
payments are now
accepted as evidence in
court.
o None. Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Agents:
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
agent banking and
mobile money
o Three banks actually
commenced
commissioning of bank
o The commissioned bank
agents are concentrated
mainly in Lagos State and in
Central Bank of
Nigeria
(Banking and
Page 95
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
regulations agents. As at December
2015, 688 bank agents
were registered.
o The Regulatory Framework
for Licensing Super-Agents
in Nigeria was approved
and released.
o Companies submitted
applications to CBN
seeking to be licensed as
Super-Agents.
o Agent banking
sensitization was
conducted in all the six
geo-political zones in
Nigeria.
o An agent database has
been developed.
o New Guidelines on Mobile
Money Services were
approved, increasing
capitalization
requirements for MMOs.
urban centers. Rural and
peri-urban communities
need to be served better.
o Lack of unique ID of bank
and mobile money agents
provides difficulties in
measuring the actual
number of agents.
Deployment of the agent
database will help solve this
issue.
o Large difference between
total number of registered
agents and total number of
active registered agents,
implying that incentives for
agents need to be
improved.
o Lack of inter-operability
between mobile payments
platforms of different MMOs
limits uptake of mobile
money services.
Payments
System
Department)
Know Your Customer (KYC):
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Issuance of a
unique national ID
card to all
Nigerians by 2015
o As at December 2015, the
National Identity
Management Commission
(NIMC) has issued the
National Identification
Number (NIN) to about 7.2
million Nigerians (about
7.5% of adult population).
o NIN has not been made a
mandatory ID yet, which
reduces incentives to enrol
for citizens.
National
Identity
Management
Commission
(NIMC)
Awareness
campaigns on
tiered KYC
requirements
o Sensitization campaigns
were implemented on TV
and radio, throughout
Nigeria.
o None. Central Bank of
Nigeria
(Financial Policy
and Regulation
Department)
Page 96
Financial Literacy:
Initiative Key Achievements as at
2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
a financial literacy
framework
o The National Financial
Literacy Framework was
released in October 2015.
Implementation of the
short-time action plan is to
begin in 2016.
o The Framework is yet to be
formally launched /
released to the public.
Central Bank of
Nigeria
(Consumer
Protection
Department)
Collaboration with
Federal and State
Ministries of
Education to
implement
financial literacy
curricula in schools
o The Bank is collaborating
with the Federal Ministry of
Education as a member of
the Curriculum
development working
group tasked with the
drafting and inclusion of
financial literacy curricula
in schools.
o None. Central Bank of
Nigeria
(Consumer
Protection
Department)
Collaboration with
the CBN and
financial service
providers to
implement
financial literacy
campaigns
o The Central Bank of
Nigeria as part of its
harmonized sensitization
campaigns provided
financial education in over
10 states across the
Federation in 2015.
o The Bank is also
collaborating with several
financial literacy
institutions, such as Mercy
Corps or GIZ, to implement
financial literacy across
Nigeria.
o None. Central Bank of
Nigeria
(Consumer
Protection
Department)
Consumer Protection:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Implementation of
a Consumer
Protection
Framework for
financial services
o The Consumer Protection
Framework was
developed.
o Approval is still outstanding
before it can be
implemented.
Central Bank of
Nigeria
(Consumer
Protection
Department)
Page 97
Initiatives for Women:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Targeting of 60% of
the MSMEDF at
women
o Sensitization campaigns
were conducted to
encourage women to
access the Fund.
o A process to deploy an IT
database on the MSMEDF
has been initiated. The
database will facilitate
analysis of data, such as by
gender.
o Several participating
financial institutions are not
able to provide all the
required data.
o Lack of an IT database
makes it hard to measure
the % of disbursement
made to women.
o Cultural issues restrict
women from accessing the
Fund.
Central Bank of
Nigeria
(Development
Finance
Department)
Requirement of
minimum level of
30% of female staff
in MFBs
o The strategy of the CBN
department is to
encourage gender
diversity in MFBs through
capacity building.
o The current focus is to build
non-financial data to
facilitate a baseline
assessment of the gender
distribution in the industry
and the strategy to close
the gap. This will provide
an empirical basis to
attract funding and
technical support from
development partners for
capacity building on a
cost-sharing basis.
o MFBs would be
encouraged to nominate
more eligible women for
capacity enhancement
program to prepare them
to take up headship
positions in the industry,
thus contributing towards
the achievement of the
strategy target.
o Poor response rate from
MFBs to provide information
on their current positions to
enable the CBN provide
the baseline data and
statistics for decision
making.
Central Bank of
Nigeria (Other
Financial
Institutions
Supervision
Department)
Encouragement of
women who have
an appropriate
business to
become agents
o Sensitization campaigns
have taken place in
various places to enable
the women embrace this
business line.
o Awareness on agent
banking still needs to be
increased as only three
banks had commenced
deploying bank agents as
at December 2015.
o Female mobile money
agents were found to be
less satisfied with their
mobile money business
than male mobile money
agents (EFInA, 2015).
Central Bank of
Nigeria
(Banking and
Payments
System
Department)
Page 98
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Entrepreneurship
development and
financial linkage
programmes
tailored specifically
to women
o The Entrepreneurship
Development Centres are
encouraged to ensure that
at least 40% of participants
are women.
o As at December 2015, a
total of 8,707 women had
been trained in the EDCs,
which amounts to 38.8% of
all participants.
o In 2015 only, 4,491 women
were trained, which
amounted to 37.8% of all
participants – slightly below
the target of 40% female
participation.
o Cultural issues in the North
of the country restrict
women from participation
in entrepreneurship
trainings.
Central Bank of
Nigeria
(Development
Finance
Department)
Introduction of a
specialized
financial literacy
framework for
addressing cultural
issues that
contribute to the
financial exclusion
of women
o The National Financial
Literacy Framework
developed in 2015
segments the Nigerian
population into different
categories for the delivery
of financial education
including Adult Formal,
Adult Emerging, Youth,
Intermediaries market
segments.
o Women are not explicitly
catered to in the
framework but have been
catered to as part of the
other segments identified.
Central Bank of
Nigeria
(Consumer
Protection
Department)
Implementation of
interest drawback
schemes targeted
at women
o The interest drawback
scheme of the Agricultural
Credit Guarantee Scheme
Fund (ACGSF), which pays
back 40% of the interest
paid to beneficiaries upon
timely repayment of the
loans, is to both men and
women. Women have
participated and
benefitted from the
scheme.
o No issues at the moment. Central Bank of
Nigeria
(Development
Finance
Department)
Initiatives for Children and Youth:
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
Development and
implementation of
a framework for
child and youth
finance
o The Financial Inclusion
Special Interventions
Working Group was
established and
inaugurated. One of the
three priority population
segments of this Working
Group is the youth.
o The Working Group has
o None. Federal Ministry
of Youth
Development
Page 99
Initiative Key Achievements as at 2015 Implementation Issues
Primary
Responsible
Institution
defined a work plan with
specific initiatives targeting
the youth.
Implementation of
children and youth
financial literacy
initiatives in
Nigerian
educational
institutions
o A Curriculum Development
Working Group has been
established under the
Financial Literacy Working
Group to develop financial
literacy curriculum for
primary and senior
secondary education in
Nigeria.
o No curriculum on financial
literacy for tertiary
institutions has been
developed.
Central Bank of
Nigeria
(Consumer
Protection
Department)
Page 100
8. REFERENCES
Andrianaivo, M.; and K. Kpodar. 2011. “ICT, Financial Inclusion, and Growth: Evidence
from African Countries.” IMF Working Paper WP/11/73. Available at:
https://www.imf.org/external/pubs/ft/wp/2011/wp1173.pdf. Accessed in June 2016.
Central Bank of Nigeria (CBN). 2012a. ”National Financial Inclusion Strategy.” Abuja,
October 2012.
Central Bank of Nigeria (CBN). 2012b. Revised Regulatory and Supervisory Guidelines for
Microfinance Banks (MFBs) in Nigeria.” Available at:
http://www.cenbank.org/out/2013/ccd/amended%20regulatory%20and%20supervi
sory%20guidelines%20for%20mfb.pdf. Accessed in June 2016.
Central Bank of Nigeria (CBN). 2015. “Financial Access Atlas Nigeria, 2015.” Interactive
online maps available at: www.fspmaps.com. Accessed in June 2016.
Enhancing Financial Innovation & Access (EFInA). 2010. “EFInA Access to Financial
Services in Nigeria 2010 Survey – Key Findings.” Available at:
http://www.efina.org.ng/assets/Documents/EFInAAccess-to-Financial-Services-in-
Nigeria-2010-surveyKey-
Findings.pdf?phpMyAdmin=%2CWvBxPNpx0z2BcKe8h2UcHJI%2CXb. Accessed in
June 2016.
Enhancing Financial Innovation & Access (EFInA). 2014. “EFInA Access to Financial
Services in Nigeria 2014 Survey.” Key Findings available at:
http://www.efina.org.ng/assets/ResearchDocuments/A2F-2014-
Docs/Updated/EFInA-Access-to-Financial-Services-in-Nigeria-2014-Survey-Key-
FindingswebsiteFINAL.pdf. Accessed in June 2016.
Enhancing Financial Innovation & Access (EFInA). 2015. “EFInA Mobile Money Agent
Survey – Key Findings.” Available at:
http://www.efina.org.ng/assets/ResearchDocuments/OtherResearch/EFInA-Agent-
Survey-Key-Findings.pdf. Accessed in June 2016.
National Pension Commission. 2016. “First Quarter 2016 Report.” Available at:
http://www.pencom.gov.ng/docs/1467554177_First_Quarter_Report_2016.pdf.
Accessed in June 2016.
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